Suppose that as a result of a stock market boom, consumers become less concerned about saving for retirement and increase their current consumption expenditures. Which of the following would you expect to occur as a result of this change?
a. In the short run, unemployment will increase and inflation will fall.
b. In the short run, unemployment will increase and inflation will rise.
c. In the short run, unemployment will decrease and inflation will rise.
d. In the short run, unemployment will decrease and inflation will fall.
c
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For a single-price monopolist, why is marginal revenue less than price?
A) Because the firm is a price taker. B) To sell another unit, the price must be lowered. C) Demand is elastic when another unit is sold. D) Demand is inelastic when another unit is sold. E) The question is false because marginal revenue is always equal to price.
An important role of financial institutions is to
A) provide borrowers with low interest rates. B) provide information to lenders about the quality of financial claims issued. C) buy primary securities. D) control the money supply.