If the bidders at a second-price auction have true values of $78, $72, $66, and $65, the item will sell for
a. $78
b. just under $78
c. $72
d. just over $72
c
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Suppose the nominal annual interest rate on a 2-year loan is 8% and lenders expect inflation to be 5% in each of the two years. The annual real rate of interest is
A. 3%. B. 6%. C. 8%. D. 2%.
Advocates of active stabilization policies, in defense of their views, argue that
a. stabilization is less necessary than is commonly advocated by monetarists. b. discretionary policy in not necessary because automatic stabilizers are sufficient. c. perfect stabilization is not possible, but moderate improvements in economic performance are possible, such as the response to the events of September 11, 2001. d. All of the above are correct.
The supply curve is influenced by
A) the income of consumers. B) the number of customers in the market. C) the prices of the inputs required to produce the product. D) the expectations of future profit.
If an economy produced 10 pizzas at $20 each and fifteen gallons of root beer at $5 each, the total value of these goods and services would be
A. $75. B. $200. C. $275. D. $2,750.