Voluntary exchange increases economic efficiency
A) because neither the buyer nor the seller would agree to a trade unless they both benefit.
B) because voluntary exchange only takes place with government permission.
C) because it is free and consequently does not cost anything.
D) because it allows wealthy individuals to act altruistically and give to the poor.
Answer: A
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Interest rates spreads between corporate and government bonds ________
A) are procyclical B) have the same characteristics as the government interest rate spreads C) are countercyclical D) all of the above E) none of the above
The price of a candy bar is $1.13 in Year 1 and $1.18 in Year 2. The nominal wage rate is $8 in year 1 and $9 in year 2. What is the approximate percentage change in the real wage rate from year 1 to year 2?
A. 8% B. 2% C. 6% D. 4%