If planned aggregate spending in an economy can be written as PAE = 15,000 + 0.6Y ? 20,000r, and potential output equals 34,000, what real interest rate must the Federal Reserve set to bring the economy to full employment?
A. 3 percent
B. 7 percent
C. 6 percent
D. 5 percent
Answer: B
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If all of the divisions in a vertically integrated firm are owned by the same company, why is it possible that asymmetric information problems can lead to inefficient outcomes in vertically integrated firms?
A) Divisions that produce parts for other divisions have effective monopoly power, so the outcome for these division must be inefficient. B) This outcome is no longer possible in the U.S. after passage of the Sarbanes-Oxley law. C) Vertically integrated firms are often subject to antitrust investigations, so managers routinely limit the amount of information that flows between divisions. D) Managers in some divisions may not have information about production capacities or costs in related divisions.
Lou and Alex live together and share household chores. They like to cook some meals ahead of time and eat leftovers. The accompanying table shows the number of rooms they can each clean and the number of meals they can each cook in an hour. Rooms Cleaned Per HourMeals Cooked Per HourLou54Alex33Which of the following is true?
A. Alex has both an absolute advantage and a comparative advantage over Lou in both tasks. B. Alex has a comparative advantage over Lou in cleaning. C. Lou has both an absolute advantage and a comparative advantage over Alex in both tasks. D. Lou has a comparative advantage over Alex in cleaning.
A person who has given up looking for work is termed a _____.
Fill in the blank(s) with the appropriate word(s).
Four main arguments have been made for trade protection: (1) the ______ argument; (2) the _______ argument; (3) the ________ argument; and (4) the ________ argument.
Fill in the blank(s) with the appropriate word(s).