When the economy is operating at an output rate less than full-employment capacity,

a. a strong demand for resources will cause resource prices to rise.
b. actual unemployment will be less than the natural rate of unemployment.
c. the rate of inflation will tend to rise.
d. weak demand for investment will place downward pressure on real interest rates.


D

Economics

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Is it more efficient for a group of musicians to perform a show "unplugged" (with acoustic instruments) or with state-of-the-art electric instruments?

A) Unplugged is more efficient because the instruments are considerably less expensive to operate. B) It depends on what the musicians are trying to accomplish. C) The use of electric instruments is more efficient because acoustic instruments have become more expensive in recent years. D) It depends exclusively on the relative ratios of energy output to energy input in each instrument class.

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The First Welfare Theorem holds that the allocation of goods resulting from competitive prices is "efficient," which is the equivalent of "equitable." 

Answer the following statement true (T) or false (F)

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Which of the following is an example of a monetary policy?

a. Feds reducing bank lending b. Government decreasing the tax rate c. Government increasing the level of technology d. Decreasing government spending

Economics

In the textual example, Muhammad Yunus was highly successful in his use of applying social incentives through group responsibility in order to maximize loan repayment rates. This success created an incentive for other banks to:

A. go out of business. B. seek government action to ban group responsibility lending. C. avoid catering to a high risk group. D. offer similar loans to the poor.

Economics