Payments by a corporation to its shareholders are known as
A) stocks.
B) bonds.
C) coupons.
D) dividends.
Table 7-6
Production and
Consumption Production
Without Trade With Trade
Estonia and Morocco can produce both swords and belts. Table 7-6 shows the
production and consumption quantities without trade, and the production numbers with
trade.
Refer to Table 7-6. If the actual terms of trade are 1 belt for 1.5 swords and 70 belts are
traded, how many belts will Estonia consume?
A) 50
B) 70
C) 90
D) 120
Figure 3-2
Refer to Figure 3-2. An increase in the expected future price of the product would be
represented by a movement from
A) A to B.
B) B to A.
C) S1 to S2.
D) S2 to S1.
Crowding out will be greater
A) the less sensitive consumption spending is to changes in the interest rate.
B) the further equilibrium GDP is below potential GDP.
C) the more sensitive investment spending is to changes in the interest rate.
D) if the economy is in recession, rather than at full employment.
The federal government debt as a percentage of GDP did not rise
A) during the Great Depression.
B) during World War II.
C) during the 1960s.
D) during the 1980s.
What do economists call the situation where a hired manager does not have the same
interests as the owners of the business?
A) conquest and control
B) a financial problem
C) a principal-agent problem
D) a financial intermediary problem
Shondra’s real wage in 2014 is $18.50. If the price level is 106, what is Shondra’s
nominal wage?
A) $19.61
B) $18.61
C) $18.50
D) $17.44
In 2013, Ford Motor Company’s sales were rising. These events were caused by
A) an economic recession.
B) an economic expansion.
C) an increase in advertising.
D) improving quality of service.
Traditionally, Wall Street investment banks had been organized as partnerships, but by
2000 they had converted to being publicly traded corporations. As partnerships, the
principle-agent problem is ________, but as publicly traded corporations, the
principal-agent problem is often ________.
A) increased; more severe
B) increased; less severe
C) reduced; more severe
D) reduced; less severe
Consider the following data for a closed economy:
a. Y = $12 trillion
b. C = $8 trillion
c. I= $3 trillion
d. TR = $2 trillion
e. T = $3 trillion
Use the data provided to calculate the level of private saving and the level of public
saving and demonstrate their relationship to investment.
The tax multiplier equals the change in ________ divided by the change in ________.
A) taxes; equilibrium real GDP
B) equilibrium real GDP; taxes
C) taxes; consumption spending
D) consumption spending; taxes
In 2008, Timothy Geithner referred to investment banks, money market mutual funds,
hedge funds, and other financial firms engaged in similar activities as the
A) shadow banking system.
B) commercial banking system.
C) securitization market.
D) secondary market.