Recall the Application about the behavior of prices in retail catalogs to answer the following question(s). According to this Application, the prices which were tracked in the retail catalogs exemplified the macroeconomic concept of the short run, a period of time in which:
A. price changes are significant because the aggregate supply curve is vertical.
B. prices never change because the aggregate demand curve is vertical.
C. prices change frequently because of changes in aggregate supply.
D. prices don't change very much, implying that the aggregate supply curve is relatively flat.
Answer: D
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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 not to expand is:
A. $400,000. B. $200,000. C. $250,000. D. $225,000.
Cashing out capital gains in Virtual Currency System #3 (i.e., turning virtual capital gains into real world currencies) causes the nation's:
a. Monetary base to rise. b. M2 money supply to rise. c. M2 money multiplier to rise. d. Monetary base to remain the same.
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In Exhibit 3-16, if the market price of chairs is initially $15, a movement toward equilibrium would require:
A. ?no change, because an equilibrium already exists. B. ?the price to fall below $15 and both the quantity supplied and the quantity demanded to fall. C. ?the price to remain the same, but the supply curve to shift to the left. D. ?the price to fall below $15, the quantity supplied to fall, and the quantity demanded to rise.?
The chairperson of the Federal Reserve's Board of Governors is:
A. elected by the public. B. selected by commercial banks. C. appointed by the Board of Governors. D. appointed by the president.