(Last Word) According to the Austrian School, the best explanation for what caused the Great Recession was that:
A. tax rates that were too high discouraged spending.
B. government spending that was too low created insufficient public capital.
C. interest rates that were too low induced excessive borrowing.
D. interest rates that were too high discouraged firm borrowing and investment.
Answer: C
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The table above represents the marginal cost and marginal benefit associated with pizza (in terms of movies). What quantity of pizza should be produced if resources are to be used efficiently?
A) 5 pizzas B) 6 pizzas C) 7 pizzas D) 8 pizzas
Suppose you value a special watch at $100 . You purchase it for $75 . On your way home from class one day, you lose the watch. The store is still selling the same watch, but the price has risen to $85 . Assume that losing the watch has not altered how you value it. What should you do?
a. Pay the $85 to buy the watch. b. Wait to see if the watch goes on sale. If the price drops to $75 or less, buy the watch. c. Wait to see if the watch goes on sale. If the price drops to $25 or less, buy the watch. d. Do not buy the watch.