The fact that financial intermediaries employ experts to carry out particular activities and so lower transactions costs is usually associated with the following economic concept:
A. economies of scale.
B. comparative advantage.
C. the law of demand.
D. information costs.
Answer: B
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Suppose the production of paved roadways can be represented as q = L0.5 + K0.5. Which of the following statements is (are) TRUE?
A) Labor is subject to diminishing marginal productivity in the short run. B) Labor and capital are imperfect substitutes. C) The isoquants for paved roadways are convex. D) All of the above.
Tax cuts
a. can easily target investment spending, but investment spending falls by only a small percentage during recessions. b. can easily target investment spending, which falls by a large percentage during recessions. c. cannot easily target investment spending, but investment spending falls by only a small percentage during recessions. d. cannot easily target investment spending, which falls by a large percentage during recessions.
All of the following are traditional economic views except:
A. revealed preference shows researchers what the bad choices are. B. choice architects have a responsibility to remain neutral when it comes to choices. C. choice architecture is ineffective. D. there is no such thing as a bad choice.
Answer the following questions true (T) or false (F)
1. Prior to the 1930s, the majority of dollars spent by government was spent at the state and local levels. 2. Expansionary fiscal policy involves increasing government purchases or increasing taxes. 3. Contractionary fiscal policy is used to decrease aggregate demand in an attempt to fight rising inflation.