The army is more likely than a business firm to assign a highly-skilled person to a job requiring little skill because the people who assign military personnel
A) are generally guided by the public interest rather than private interest.
B) incur little cost from misallocating personnel.
C) must consider the welfare of the whole rather than the profitability of the enterprise.
D) work for the government, where there is less demand for skilled personnel.
B
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Why are corporations more likely to raise funds externally by debt instead of equity?
A) moral hazard is less of a problem with debt contracts B) transactions costs tend to be higher in the stock market than bond market C) to avoid paying dividends D) interest rates tend to be lower than dividend rates
If the nominal interest rate is 6.3 percent and the inflation rate is 7.2 percent, then the real interest rate equals:
a. - 13.5 percent. b. + 13.5 percent. c. - 0.9 percent. d. -7.2 percent. e. + 1.1 percent.
Answer the following statements true (T) or false (F)
1. United States has had little success with the surplus aspect of balancing the budget over the period of a business cycle. 2. The full-employment balanced budget always shows a surplus. 3. A deficit budget adds to the national debt. 4. The United States will face bankruptcy if the national debt ever reaches a figure higher than its GDP. 5. The government’s ability to repay the national debt is governed only by the total assets of the economy.
Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B