If prices rise on average in the U.S. economy, the purchasing power of a dollar declines.
Indicate whether the statement is true or false
Ques. 2If inflation in the United States is lower than inflation in other countries, what will be the effect on net exports for the United States?
A) Net exports will rise as U.S. exports increase.
B) Net exports will decrease as U.S. imports decrease.
C) Net exports will decrease as U.S. exports decrease.
D) Net exports will rise as U.S. imports increase.
Ques. 3Carefully define the two categories of saving in the economy.
What will be an ideal response?
Ques. 4Which of the following would most likely induce the Federal Reserve to conduct expansionary monetary policy? A significant decrease in
A) business taxes. B) oil prices.
C) investment spending. D) income tax rates.
Ques. 5Refer to Figure 18-6. If area X = 2,060, area Y = 240, and area Z = 2,700, calculate the Gini coefficient for Islandia.
A) 0.41 B) 0.45 C) 0.70 D) 0.76
Ques. 6Refer to Scenario 25-2. As a result of Kristy's deposit, Bank A's excess reserves increase by
A) 2,000. B) 8,000. C) 10,000. D) 50,000.
Ques. 7Mel's House of Cars is an automobile dealership that sells both new and used cars. Two other dealerships located near Mel's pay their salespeople a straight salary - they receive no commission for each car they sell.
Mel has decided to pay all of his salespeople a commission on all car sales. Which of the following is most likely to occur as a result of Mel's decision?
A) Mel will experience a principal-agent problem. Some of his salespeople will tend to shirk because they will not be paid if they sell no cars, regardless of how hard they work.
B) Mel will be able to hire some of the most productive salespeople who work for the other two dealerships.
C) Mel risks violation of federal law that regulates firms' compensation policies.
D) Mel will have difficulty finding salespeople. Research by labor economists has found that most employees prefer the security of a salary to the uncertainty of being paid based on how much revenue they generate for their employers.
Ques. 8Refer to Figure 16-6. If Sensei charges the competitive price for his classes, what is the maximum amount of admission fee that he can collect from his customers?
A) the area A + C + D + G + H B) the area A + B
C) the area A + B + C + D D) the area A + B + C + D + E
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