When households find themselves holding too much money, they respond by
a. purchasing interest-earning financial assets and interest rates fall.
b. purchasing interest-earning financial assets and interest rates rise.
c. holding the extra money and interest rates rise.
d. selling interest-earning financial assets, which eliminates the excess supply of money.
a
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The base year in the consumer price index (CPI) is:
a. given a value of zero. b. a year chosen as a reference for prices in all other years. c. always the first year in the current decade. d. established by law.
In an open economy, national saving can be less than investment
a. True b. False Indicate whether the statement is true or false
Smith and Jones comprise a two-person economy. Their hourly rates of production are shown in the accompanying table. Calculators Per HourComputers Per HourSmith10010Jones1206 Suppose Smith and Jones begin by producing 100 calculators per hour; as Smith and Jones choose to efficiently produce fewer computers and more calculators, ________ should devote more time to calculators because his ________.
A. Jones; absolute advantage is smaller B. Smith; opportunity costs are lower C. Smith; absolute advantage is larger D. Jones; opportunity costs are lower
A proportional tax results in:
A. a larger percentage of income going to taxes as income rises. B. the same percentage of income going to taxes for all taxpayers. C. the same dollar amount going to taxes for all taxpayers. D. a smaller percentage of income going to taxes as income rises.