Answer the following statement true (T) or false (F)
1) People who engage in mental accounting are more likely to purchase overpriced warranties.
2) According to behavioral economists, people tend to put too much weight on the future when
they make decisions.
3) Time inconsistency refers to the phenomenon where your present self misjudges what your
future self will do.
4) Time inconsistency refers to the persistent underestimation of how long a task will take to
perform.
1) T
2) F
3) T
4) F
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If the unemployment rate in the economy is steady at 4 percent per year, how does the short-run Phillips curve predict that the inflation rate will be changing, if at all? What will happen if the unemployment rate now rises to 7 percent per year?
Assume there are no changes to inflation expectations. Provide an appropriate graph to support your discussion.
Public companies are companies that
A. have sold shares of stock to the general public. B. act as financial intermediaries. C. have not yet had an initial public offering. D. are owned or managed by the federal government.