One problem with using monetary policy to address "bubbles" in asset markets is that:
A. reducing the real interest rate to deal with the bubble could lead to inflation.
B. the Federal Reserve is better than financial-market professionals at identifying bubbles.
C. monetary policy is not a very good tool for addressing the problem of inappropriately high asset prices.
D. the Federal Reserve is not interested in stabilizing output.
Answer: C
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Self-interest relates to
A) only monetary objectives. B) both monetary and nonmonetary objectives. C) the ceteris paribus assumption. D) normative economic analysis and not positive economic analysis.
All externalities are detrimental
a. True b. False Indicate whether the statement is true or false
Which of the following is true of matrix organizations?
A. Employees are more likely to focus on the overall business process rather than on their functional specialty. B. Influence costs are low as there are separate product and functional managers. C. Employees have strong incentives to cooperate with other teams within a company. D. There are well-defined lines of authority, eliminating scope of interdependence and lack of incentives.
If the government were to impose a lump-sum tax on a monopolist, what is likely to happen to the quantity produced of a commodity and the price charged relative to the situation where there is no lump-sum tax imposed?
A) No change in price, quantity produced, or profit would occur. B) The price would fall and the quantity produced would fall C) No change in price or quantity produced, only a reduction in profit D) The price would fall but the quantity produced would rise