Keynesians believe ________
A) that economies move quickly to their long run equilibrium levels
B) that the government should pursue active policies to stabilize economic fluctuations
C) that the long run is more important than short-run fluctuations
D) all of the above
E) none of the above
B
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An investment in human capital will be financially profitable if the present discounted value of the future earnings generated by the investment exceeds the
a. present discounted value of both the direct and indirect costs of the investment. b. dollar amount of the direct and indirect costs of the investment. c. present discounted value of only the direct costs of the investment. d. present discounted value of only the indirect costs of the investment.
Let if be the interest rate being paid on a foreign bond, and let i be the interest rate being paid for a domestic bond; let P be the price of the domestic bond and let Pf be the price of the foreign bond. If exchanges rates are fixed and the bonds are equal in terms of risk:
A. if = i. B. the expected return from the foreign bond = the expected return from the domestic bond. C. P = Pf times units of domestic currency/unit of foreign currency. D. all of the answers given are correct.
Explain why government, rather than private firms, is required for efficient mosquito eradication programs.
What will be an ideal response?
A rational person:
A. makes choices based on total benefits and total costs. B. undertakes activities until the net benefits become less than zero. C. considers the financial benefits and financial costs of making a choice. D. makes choices based on added benefits and added costs.