A technological improvement lowers the cost of producing corn. As a result, the price of a pound of corn ____ and the quantity of corn ____. Question 13 options:
A. falls; increases
B. falls; does not change
C. falls; decreases
D. rises; decreases
E. rises; increases
A. falls; increases
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The optimal treatment of a tax on a stock of wealth depends ____
a. on how the flow of income from that wealth is taxed b. on how the stock itself is taxed c. on whether or not there is an estate tax d. on the size of a stock
John is trying to decide whether to expand his business or not. If he continues his business as it is, with no expansion, there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000. If he does expand, there is a 30 percent chance he will earn $100,000, a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000. It will cost him $150,000 to expand. The expected value of John's earnings if he chooses to expand is:
A. $320,000 B. $230,000 C. $900,000 D. $140,000
A decrease in expected inflation for any given nominal interest rate will cause:
A. bond prices to decrease and interest rates to increase. B. the bond supply curve to shift to the left. C. the bond demand curve to shift to the left. D. bond prices to increase and interest rates to decrease.
From the early 1980s through 2000, the Federal Reserve's primary focus was on
A. controlled inflation and stable growth. B. ensuring rapid growth. C. stable employment through monetary expansion. D. keeping gold prices stable.