Economics

If interest rates are positive, one dollar today is worth

If interest rates are positive, one dollar today is worth

[html]Question 1.A person who strongly wishes to avoid risk would pick which of the following choices?

▸ a 50% chance of winning $750 or a 50% chance of winning $0.

▸ a 100% chance of getting $375

▸ a 50% chance of g

nyounger   60   1 Reply

anthead

Between the first quarter of 2000 and the first quarter of 2006, the value of housing wealth

Between the first quarter of 2000 and the first quarter of 2006, the value of housing wealth

[html]Question 1.When there is a run up in stock prices

▸ saving increases.

▸ investment increases.

▸ inflation increases.

▸ interest rates decrease.Question 2.Between the first

lihui   71   1 Reply

johnsyke

A bond holder is part owner of the firm.

A bond holder is part owner of the firm.

Question 1.A bond is a debt of the issuer.

▸ true

▸ falseQuestion 2.A bond holder is part owner of the firm.

▸ true

▸ false

Kaevyn04   49   1 Reply

rand22

A stock bubble is against insider trading laws and if you participate in one you can be arrested.

A stock bubble is against insider trading laws and if you participate in one you can be arrested.

[html]Question 1.A stock bubble exists when the price of a stock is greater than the discounted value of its expected future dividends.

▸ true

▸ falseQuestion 2.A stock bubble is a

shayeshaye00   35   1 Reply

kirakira15

The Dow-Jones Industrial Average index is the broadest U.S. stock market index.

The Dow-Jones Industrial Average index is the broadest U.S. stock market index.

[html]Question 1.A stock market boom leads to greater investment by firms.

▸ true

▸ falseQuestion 2.The Dow-Jones Industrial Average index is the broadest U.S. stock market index.

Clement   81   1 Reply

anuja709

If the stock market crashes, consumption will fall.

If the stock market crashes, consumption will fall.

Question 1.If the stock market booms, investment will rise.

▸ true

▸ falseQuestion 2.If the stock market crashes, consumption will fall.

▸ true

▸ false

dillon_green23   90   1 Reply

mnp2357

If you buy a bond from a firm, you are making a loan to the firm.

If you buy a bond from a firm, you are making a loan to the firm.

Question 1.A bond is an asset of the holder.

▸ true

▸ falseQuestion 2.If you buy a bond from a firm, you are making a loan to the firm.

▸ true

▸ false

asdoooeoe   47   1 Reply

cooldawg69

Other things being equal, the larger the expected future dividends to be received from stock ...

Other things being equal, the larger the expected future dividends to be received from stock ...

[html]Question 1.The total return that the owner of a stock receives is the value of the dividends received minus the capital gain or loss.

▸ true

▸ falseQuestion 2.Other things be

Crystalboo92   68   1 Reply

tlaster

The price of a stock should equal the face value of its expected future dividends.

The price of a stock should equal the face value of its expected future dividends.

[html]Question 1.The amount of a stock's dividend cannot change from year to year once the dividend has been paid out for the first time.

▸ true

▸ falseQuestion 2.The price of a st

Begonia   60   1 Reply

anthead

If the stock market booms, consumption will rise.

If the stock market booms, consumption will rise.

Question 1.If the stock market crashes, investment will fall.

▸ true

▸ falseQuestion 2.If the stock market booms, consumption will rise.

▸ true

▸ false

spruckj   66   1 Reply

osvaldoguzman

The implementation lag for fiscal policy is longer than for monetary policy because

The implementation lag for fiscal policy is longer than for monetary policy because

[html]Question 1.If the government spending multiplier were 3.5, a $2 billion decrease in government spending would lower GDP by

▸ $70 billion after one year.

▸ $2 billion after two years.

▸ $1.5 billion after one ye

jus10n   88   1 Reply

Woo

The ________ lag for monetary policy tends to be much shorter than for fiscal policy because only ...

The ________ lag for monetary policy tends to be much shorter than for fiscal policy because only ...

[html]Question 1.Fiscal policy and monetary policy have a similar ________ time lag.

▸ implementation

▸ structural

▸ recognition

▸ responseQuestion 2.The ________ lag for monetar

seeb1999   80   1 Reply

binva

Because the Fed's current tool for changing the interest rate is to change the ________, once the ...

Because the Fed's current tool for changing the interest rate is to change the ________, once the ...

[html]Question 1.If the government spending multiplier were 4.2, a $1 billion increase in government spending would raise GDP by

▸ $2.1 billion after one year.

▸ $1 billion after two years.

▸ $3.2 billion after one y

mdagenh1   42   1 Reply

aishasu

The ________ lag for fiscal policy requires changes in congressional-approved spending and tax programs.

The ________ lag for fiscal policy requires changes in congressional-approved spending and tax programs.

[html]Question 1.In general, fiscal policy has a ________ implementation lag than monetary policy and a ________ response lag.

▸ shorter; shorter

▸ longer; longer

▸ longer; shorter

▸ shorter; longer

yufeige4   52   1 Reply

yesimshay

The time it takes policy makers to see that the economy is going into a recession or an inflation is ...

The time it takes policy makers to see that the economy is going into a recession or an inflation is ...

[html]Question 1.The time it takes a change in economic policy to induce people and firms to change their behavior is the implementation lag.

▸ true

▸ falseQuestion 2.The time it t

daniellasousa   61   1 Reply

osvaldoguzman

The goal of stabilization policy is to smooth out fluctuations in GDP.

The goal of stabilization policy is to smooth out fluctuations in GDP.

[html]Question 1.The lags of monetary and fiscal policy imply that government stabilization policy is likely to be optimal.

▸ true

▸ falseQuestion 2.The goal of stabilization polic

Lopezj273   59   1 Reply

rinderbik

Because the Fed can react to changes in the economy much more quickly than can Congress, time lags ...

Because the Fed can react to changes in the economy much more quickly than can Congress, time lags ...

[html]Question 1.If the economy is in a boom, the response lag is generally shorter for monetary policy than for fiscal policy, but if the economy is in a slump, the response lag is generally shorter for fiscal policy than

Lighting2551   49   1 Reply

whoohoo8

If the U.S. Treasury is forced to sell bills and bonds to the U.S. public to finance deficits, this ...

If the U.S. Treasury is forced to sell bills and bonds to the U.S. public to finance deficits, this ...

[html]Question 1.If the Fed buys U.S. Treasury bills and bonds to finance deficits, this means that the government is financing the deficit by

▸ lowering inflation.

▸ raising interest rates.

▸ selling capital.

▸ pri

mrive3127   37   1 Reply

whoohoo8

The ________ declared that part of the Gramm-Rudman-Hollings Act was illegal and that the mandated ...

The ________ declared that part of the Gramm-Rudman-Hollings Act was illegal and that the mandated ...

[html]Question 1.The ________ sought to reduce the federal deficit by $36 billion each year between 1987 and 1991.

▸ Sherman Antitrust Act

▸ McCain-Feingold bill

▸ Cellar-Kefauver Act

▸ Gramm-Rudman-Hollings Act

jmoney5   50   1 Reply

kamronet

The economic impact of ________ during recessionary periods is to decrease taxes.

The economic impact of ________ during recessionary periods is to decrease taxes.

[html]Question 1.The economic impact of automatic stabilizers during inflationary periods is to

▸ accelerate inflationary pressures.

▸ increase exports.

▸ have no impact on inflation.

▸ moderate inflationary pressur

asprague24   50   1 Reply

Jax

At the end of 2014, the economy was ________ and the deficit was ________.

At the end of 2014, the economy was ________ and the deficit was ________.

[html]Question 1.Cyclical deficits ________, and large structural deficits ________.

▸ are usually temporary and do not pose long-run problems; can have negative long-run consequences

▸ are usually permanent and often

FAITHBELLE   33   1 Reply

jfinn1021

________ acts as an automatic destabilizer because it requires taxes to be cut and government ...

________ acts as an automatic destabilizer because it requires taxes to be cut and government ...

[html]Question 1.Deficit targeting acts as ________ because it requires taxes to be raised and government spending to be cut during ________.

▸ an automatic stabilizer; an expansion

▸ an automatic destabilizer; an exp

Gideon123   40   1 Reply

Niquegirl21!

A negative demand shock increases consumer and investment spending and tends to increase the budget deficit.

A negative demand shock increases consumer and investment spending and tends to increase the budget deficit.

[html]Question 1.The nation's total federal debt represents the total of all accumulated deficits minus surpluses over time.

▸ true

▸ falseQuestion 2.A negative demand shock increa

Ilovebacon22   67   1 Reply

DWFG2796

If investors begin to perceive that government bonds being sold to finance a deficit have become ...

If investors begin to perceive that government bonds being sold to finance a deficit have become ...

[html]Question 1.If investors begin to perceive that government bonds being sold to finance a deficit have become more risky, the interest rate the country must pay on its bonds will decrease.

▸ true

▸ false

justinw2200   51   1 Reply

swolfe15

The idea of the ________ is that people make lifetime consumption plans.

The idea of the ________ is that people make lifetime consumption plans.

[html]Question 1.Households are said to have positive wealth when

▸ the market value of their assets is zero.

▸ the value of their assets is greater than the debts they owe.

▸ the value of their assets is equal to th

Lighting2551   75   1 Reply

BobbyD

The larger the percentage of people who work, the ________ output per capita.

The larger the percentage of people who work, the ________ output per capita.

[html]Question 1.The path of consumption over a lifetime is likely to be ________ the path of income.

▸ much more stable than

▸ much less stable than

▸ about the same as

▸ completely unrelated to

meganA   49   1 Reply

jeromet1

The substitution effect of a wage rate increase suggests that

The substitution effect of a wage rate increase suggests that

[html]Question 1.The opportunity cost of leisure will rise if

▸ the wage rate increases.

▸ the wage rate decreases.

▸ nonlabor income increases.

▸ nonlabor income decreases.Question 2.

spruckj   78   1 Reply

beunikuel

Caroline's hourly wage rate was reduced from $22 to $16. As a result of the wage decrease, Caroline ...

Caroline's hourly wage rate was reduced from $22 to $16. As a result of the wage decrease, Caroline ...

[html]Question 1.Mickey got a raise from $14 an hour to $20 an hour. As a result of the wage increase, Mickey desires to work more hours and take less hours of leisure. For Mickey

▸ the substitution effect dominates th

lstar1993   69   1 Reply

bli14

Which of the following is an example of nonlabor income?

Which of the following is an example of nonlabor income?

[html]Question 1.Holding everything else constant, the more wealth a household has

▸ the less it will consume, both now and in the future.

▸ the more it will consume now, but the less it will consume in the future.

▸

david fabos   35   1 Reply

jenniferagrethe

Assume that households have positive wealth. Which of the following explains how the income effect ...

Assume that households have positive wealth. Which of the following explains how the income effect ...

[html]Assume that households have positive wealth. Which of the following explains how the income effect of an interest rate increase affects consumption?

▸ As the interest rate increases, the opportunity cost of current consumption falls, an

asjstr   52   1 Reply

sliceofoctopi

Empirical data suggest that during recessions, individuals reduce more of their consumption of

Empirical data suggest that during recessions, individuals reduce more of their consumption of

[html]Question 1.Which of the following causes an increase in labor supply?

▸ when wages and the price level increase proportionately

▸ a decrease in income tax rates

▸ a decrease in the general price level

▸ a decr

nursemegan   48   1 Reply

osvaldoguzman

The unconstrained supply of labor refers to the amount a household ________ within a given period at ...

The unconstrained supply of labor refers to the amount a household ________ within a given period at ...

[html]Question 1.Purchases of new houses are the most volatile type of expenditures because they are very sensitive to ________, which is highly volatile.

▸ the interest rate

▸ disposable income

▸ the inflation rate

gcd99br   41   1 Reply

mace

If a policy maker wants to change taxes to encourage individuals to increase their labor supply, the ...

If a policy maker wants to change taxes to encourage individuals to increase their labor supply, the ...

[html]Question 1.The portion of a corporation's profits that the firm pays out each period to shareholders is known as

▸ capital gains.

▸ dividends.

▸ interest.

▸ retained earnings.Question 2.

yufeige4   51   1 Reply

gumpfable

The average level of one's ________ income stream is permanent income.

The average level of one's ________ income stream is permanent income.

[html]Question 1.The idea of the life-cycle theory of consumption is that people make ________ consumption plans.

▸ lifetime

▸ yearly

▸ seasonal

▸ cyclicalQuestion 2.The average

david fabos   67   1 Reply

whoohoo8

Todd's nominal wage increased by 5%, and the prices of goods that Todd buys increased by 3%. ...

Todd's nominal wage increased by 5%, and the prices of goods that Todd buys increased by 3%. ...

[html]Question 1.Jenny's hourly wage rate was increased from $17 to $21. As a result of the wage increase, Jenny desires to work fewer hours and take more hours of leisure. For Jenny

▸ the income effect must be zero.

treetreee   150   1 Reply

shawntage

Consumption will generally increase when the income tax rate ________ or transfer payments ________.

Consumption will generally increase when the income tax rate ________ or transfer payments ________.

[html]Question 1.Consumption will generally decrease when the income tax rate ________ or transfer payments ________.

▸ increases; increase

▸ increases; decrease

▸ decreases; increase

▸ decreases; decrease

jus10n   59   1 Reply

Curtis x9

The real wage rate is the nominal wage rate adjusted for inflation since some base year.

The real wage rate is the nominal wage rate adjusted for inflation since some base year.

[html]Question 1.If the substitution effect dominates the income effect, an increase in transfer payments will have a positive effect on both consumption and labor supply.

▸ true

▸ falseQuestion 2

malabranche13   79   1 Reply

DryPhantom

The path of income over a lifetime is likely to be much more stable than the path of consumption.

The path of income over a lifetime is likely to be much more stable than the path of consumption.

[html]Question 1.The idea of the "Invisible Hand" is that people make lifetime consumption plans.

▸ true

▸ falseQuestion 2.The path of income over a lifetime is likely to be much m

asdoooeoe   50   1 Reply

jackjohnson74

The tendency for ________ to decrease when ________ decreases is the result of the accelerator effect.

The tendency for ________ to decrease when ________ decreases is the result of the accelerator effect.

[html]Question 1.The tendency for investment to increase when aggregate output increases is the result of the ________ effect.

▸ accelerator

▸ multiplier

▸ substitution

▸ incomeQuestion 2.

regina nana   43   1 Reply

Va97001

The unemployment rate does not tend to fall as soon as the economy pulls out of a recession. Which ...

The unemployment rate does not tend to fall as soon as the economy pulls out of a recession. Which ...

[html]Question 1.A firm is less likely to invest in new capital if

▸ the productivity of capital is high.

▸ it has no excess capital.

▸ it does not expect future sales to grow.

▸ it is expanding into new markets.

stevengu246   49   1 Reply

Jennyyy