Questions from General Economics

Q: Why is it difficult to distinguish between frictional, structural, and

Why is it difficult to distinguish between frictional, structural, and cyclical unemployment? Why is unemployment an economic problem? What are the consequences of a negative GDP gap? What are the non...

Q: Precisely how do the MPC and the APC differ? How does

Precisely how do the MPC and the APC differ? How does the MPC differ from the MPS? Why must the sum of MPC and the MPS equal 1?

Q: Why does a downshift of the consumption schedule typically involve an equal

Why does a downshift of the consumption schedule typically involve an equal upshift of the saving schedule? What is the exception to this relationship?

Q: Identify each of the following investments as either an economic investment or

Identify each of the following investments as either an economic investment or a financial investment. a. A company builds a new factory. b. A pension plan buys some Google stock. c. A mining company...

Q: It is a fact that (1 + 0.12)

It is a fact that (1 + 0.12)3 = 1.40. Knowing that to be true, what is the present value of $140 received in three years if the annual interest rate is 12 percent? a. $1.40. b. $12. c. $100. d. $112....

Q: Demand curves slope downward because, other things held equal, LO3

Demand curves slope downward because, other things held equal, LO3 a. An increase in a product’s price lowers MU. b. A decrease in a product’s price lowers MU. c. A decrease in a product’s price rai...

Q: Asset X is expected to deliver 3 future payments. They have

Asset X is expected to deliver 3 future payments. They have present values of, respectively, $1,000, $2,000, and $7,000. Asset Y is expected to deliver 10 future payments, each having a present value...

Q: Tammy can buy an asset this year for $1,000

Tammy can buy an asset this year for $1,000. She is expecting to sell it next year for $1,050. What is the asset’s anticipated percentage rate of return? a. 0 percent. b. 5 percent. c. 10 percent. d....

Q: Sammy buys stock in a suntan-lotion maker and also stock

Sammy buys stock in a suntan-lotion maker and also stock in an umbrella maker. One stock does well when the weather is good; the other does well when the weather is bad. Sammy’s portfolio indicates th...

Q: An investment has a 50 percent chance of generating a 10 percent

An investment has a 50 percent chance of generating a 10 percent return and a 50 percent chance of generating a 16 percent return. What is the investment’s average expected rate of return? a. 10 perc...