The computerization of police departments throughout the country has greatly reduced the crime rate. What macroeconomic variable is likely to be directly affected by this change?
A. The trade deficit
B. Inflation
C. The real interest rate
D. Productivity
Answer: D
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The wage premium in the United States for college graduates over high school graduates has remained constant from 1978 to 2000
a. True b. False Indicate whether the statement is true or false
Assume that the federal government wishes to counteract inflation with a policy that has the smallest impact on the federal budget. Which of the following would you recommend?
A. Increase transfer payments. B. Increase government purchases. C. Decrease government purchases. D. Decrease transfer payments. E. Increase personal income taxes.
Suppose buyers in the used car market are willing to pay $5,000 for a plum (high-quality) used car and $2,500 for a lemon (low-quality) used car. If buyers believe that 50% of the used cars on the market are lemons (low quality), what would they be willing to pay for a used car?
A. $2500 B. $3000 C. $3750 D. $5000
If a firm has excess capacity, it
A) produces less than its efficient scale. B) should advertise to maximize profits. C) should decrease its markup to increase its profit. D) is a perfectly competitive firm. E) must face a horizontal demand curve.