Suppose you buy two tickets to the concert; one for you and one for your girlfriend. Nevertheless, the day of the concert your car brakes down preventing both of you from attending it. Assuming both you and your girlfriend had the same preferences, which of the two of you stand to lose the most from not being able to attend the concert?
A. Both of you stand to lose the same.
B. Your girlfriend.
C. You.
D. None of you would stand to lose anything.
Answer: A
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Which of the following is an argument against trying to use policy to stabilize the economy?
a. Recessions represent a waste of resources. b. Pessimism on the part of households and firms may become a self-fulfilling prophecy. c. "Leaning against the wind" requires policymakers to increase aggregate demand in recessions and reduce aggregate demand in booms. d. Macroeconomic forecasting is not developed sufficiently to allow policymakers to change aggregate demand at the proper time.
You graduate from law school and can now begin charging clients fees for your time. What impact will this have on your demand for money?
A. Your increased income will likely cause your demand for money to increase B. Your opportunity cost of making trips to the bank will decrease C. Your demand for money will not be affected D. Your increased income will likely cause your demand for money to decrease