Questions and Answers of The Law Of Healthcare Administration

5 A person buys a bond that matures in 10 years and pays a coupon rate of 10 percent. The face value of the bond is$10,000. How much money will the bondholder receive in the tenth year?
4 The face value of a bond is $10,000, and the annual coupon payment is $850. What is the coupon rate?
3 The closing price of the stock is $66.40, and the net earnings per share are $2.50. What is the stock’s P/E ratio?
2 The closing price of a stock is 90.25, and the dividend is 3.50. What is the yield of the stock?
1 You own 1,250 shares of stock X, and you read in the newspaper that the dividend for the stock is 3.88. What did you earn in dividends?
14 If you thought the share price of a stock was going to fall, would you buy a call option or a put option?
13 “The currency speculator who sells futures contracts assumes the risk that someone else doesn’t want to assume.” Do you agree or disagree? Explain your answer.
12 Why might a person buy a call option?
11 Why might a person buy a futures contract?
10 “If you can predict interest rates, then you can earn a fortune buying and selling bonds.” Do you agree or disagree?Explain your answer.
9 Why might a person purchase an inflation-indexed Treasury bond?
8 If the face value of a bond is $10,900 and the annual coupon payment is $600, what is the coupon rate?
7 “An issuer of a bond is a borrower.” Do you agree or disagree?Explain your answer.
6 Which of the two stocks has a bigger gap between its closing price and net earnings per share: Stock A with a P/E ratio of 15 or Stock B with a P/E ratio of 44? Explain your answer.
5 If the share price of each of 500 stocks rises on Monday, does everyone in the stock market believe that stocks are headed even higher? (No one will buy a stock if he or she thought share prices
4 What does it mean if someone invests in a mutual fund? in a stock market fund?
3 What does it mean to buy the market?
2 What does it mean if the Dow Jones Industrial Average rises by, say, 100 points in a day?
1 What is the purpose of financial markets?
3 Graphically show and explain the domestic and feedback effects on Real GDP in the United States as a result of contractionary monetary policy.
2 Graphically show and explain the domestic and feedback effects on Real GDP in the United States as a result of contractionary fiscal policy.
1 Starting with an exchange rate of $1 ¥114 and a price tag of¥10,000 for a Japanese item, show what happens to the price of the Japanese item if the yen depreciates by 5 percent.
20 Explain why contractionary monetary policy lowers Real GDP more in an open economy than in a closed economy.
19 Explain why contractionary fiscal policy is more likely to decrease Real GDP in a closed economy than in an open economy.
18 Explain why expansionary monetary policy is more likely to increase Real GDP in an open economy than in a closed economy.
17 Why might import spending rise in a country soon after a depreciation of its currency? Is import spending likely to fall over time? Explain your answers.
16 Suppose country A undertakes a policy mix of contractionary fiscal policy and expansionary monetary policy. What do you predict would happen to real interest rates, the value of country A’s
15 Explain how a change in the exchange rate can change both the U.S. AD and SRAS curves.
14 “The discussion of the J-curve points out that economists sometimes think in terms of both the short run and the long run.” Do you agree or disagree? Explain your answer.
13 If Americans buy fewer units of good X, which is produced in Japan, will they necessarily spend less money overall on good X? Explain your answer.
12 Give a numerical example to illustrate what the depreciation of a country’s currency does to the prices of its imports.
11 Assume a two-country world where the two countries are the United States and Japan. Note the impact on U.S. Real GDP of each of the following:a. A fall in the real interest rate in the United
10 How do tariff rates in the United States today compare with 1946?
9 Will globalization lead to some people losing jobs? Explain your answer.
8 David Friedman said that free (international) trade is a technology. Explain what he means.
7 What is Thomas Friedman’s “Golden Arches theory of conflict prevention”?
6 Some have argued that the end of the Cold War acted as a catalyst toward greater globalization. How so?
5 What effect might advancing technology have on globalization?
4 Identify and explain two of the benefits and two of the costs of globalization.
3 How might governments impact globalization?
2 If globalization continues over the next few decades, how might your life be different?
1 Why might it be easier to recognize the costs of globalization than the benefits?
6 Why does the balance of payments always equal zero?
5 If the current account is $45 billion, the capital account is+ $55 billion, and the official reserve balance is - $1 billion, what does the statistical discrepancy equal?
4 If $1 equals 31 rubles, what does 1 ruble equal?
3 If $1 equals 7.7 krone (Danish), what does 1 krone equal?
2 If $1 equals ¥0.0093, what does ¥1 equal?
1 The following foreign exchange information appeared in a newspaper:a. Between Thursday and Friday, did the U.S. dollar appreciate or depreciate against the Russian ruble?b. Between Thursday and
10 If everyone in the world spoke the same language, would the world be closer to or further from being an optimal currency area? Explain your answer.
9 Suppose the price of a Big Mac always rises by the percentage rise in the price level of the country in which it is sold.According to the purchasing power parity (PPP) theory, we would expect the
8 Suppose your objective is to predict whether the euro(the currency of the European Union) and the U.S. dollar will appreciate or depreciate on the foreign exchange market in the next two months.
7 Every nation’s balance of payments equals zero. Therefore, is each nation on an equal footing in international trade and finance with every other nation? Explain your answer.
6 Individuals do not keep a written account of their balance of trade with other individuals. For example, John doesn’t keep an account of how much he sells to Alice and how much he buys from her.
5 What are the strong and weak points of the flexible exchange rate system? What are the strong and weak points of the fixed exchange rate system?
4 Suppose Canada has a merchandise trade deficit and Mexico has a merchandise trade surplus. The two countries have a flexible exchange rate system; so the Mexican peso appreciates and the Canadian
3 Suppose the media report that the United States has a deficit in its current account. What does this imply about the U.S. capital account balance and official reserve account balance?
2 Give an example that illustrates how a change in the exchange rate changes the relative price of domestic goods in terms of foreign goods.
1 Suppose the United States and Japan have a flexible exchange rate system. Explain whether each of the following events will lead to an appreciation or depreciation in the U.S. dollar and Japanese
2 In the following figure, PW is the world price and PW + T is the world price plus a tariff. Identify the following:a. The level of imports at PW.b. The level of imports at PW + T.c. The loss in
1 Using the data in the table, answer the following questions:a. For which good does Canada have a comparative advantage?b. For which good does Italy have a comparative advantage?c. What might be a
12 If there is a net loss to society from tariffs, why do tariffs exist?
11 Some economists have argued that because domestic consumers gain more from free trade than domestic producers gain from (import) tariffs and quotas, consumers should buy out domestic producers and
10 Suppose that a constitutional convention is called tomorrow and that you are chosen as one of the delegates from your state. You and the other delegates must decide whether it will be
9 Even though Jeremy is a better gardener and novelist than Bill is, Jeremy still hires Bill as his gardener. Why?
8 Suppose the landmass known to you as the United States of America had been composed, since the nation’s founding, of separate countries instead of separate states. Would you expect the standard
7 Suppose the U.S. government wants to curtail imports.Would it be likely to favor a tariff or a quota to accomplish its objective? Why?
6 Consider two groups of domestic producers: those that compete with imports and those that export goods. Suppose the domestic producers that compete with imports convince the legislature to impose a
5 Neither free trade nor prohibited trade comes with just benefits. Both come with benefits and costs. Therefore, free trade is neither better nor worse than prohibited trade.Comment.
4 “Whatever can be done by a tariff can be done by a quota.”Discuss.
3 The desire for profit can end up pushing countries toward producing goods in which they have a comparative advantage.Do you agree or disagree? Explain your answer.
2 If country A is better than country B at producing all goods, will country A still be made better off by specializing and trading? Explain your answer. (Hint: Look at Exhibit 1.)
1 Although a production possibilities frontier is usually drawn for a country, one could be drawn for the world. Picture the world’s production possibilities frontier. Is the world positioned at a
3 In part (a) of the following figure, the distribution of voters is skewed to the left; in part (b), the distribution of voters is skewed neither left nor right; and in part (c), the distribution of
2 Look back at Exhibit 2. Suppose that the net benefits and net costs for each person are known a week before election day and that it is legal to buy and sell votes. Furthermore, suppose there is no
1 Suppose that three major candidates, A, B, and C, are running for president of the United States and that the distribution of voters is the same as shown in Exhibit 1.Two of the candidates, A and
13 Rent seeking may be rational from the individual’s perspective, but it is not rational from society’s perspective. Do you agree or disagree? Explain your answer.
12 Evaluate each of the following proposals for reform in terms of the material discussed in this chapter:a. Linking all spending programs to visible tax hikes.b. A balanced budget amendment
11 Some individuals see national defense spending as benefiting special interests—in particular, the defense industry. Others see it as directly benefiting not only the defense industry but the
10 What are some ways of making government bureaucrats and bureaus more cost conscious?
9 John chooses not to vote in the presidential election. Does it follow that he is apathetic when it comes to presidential politics? Explain your answer.
8 Provide a numerical example that shows simple majority voting may be consistent with efficiency. Next, provide a numerical example that shows simple majority voting may be inconsistent with
7 What are some ways of reducing the cost of voting to voters?
6 It has often been remarked that Democratic candidates are more liberal in Democratic primaries and Republican candidates are more conservative in Republican primaries than either is in the general
5 If the model of politics and government presented in this chapter is true, what are some of the things we would expect to see?
4 Many individuals learn more about the car they are thinking of buying than about the candidates running for president of the United States. Explain why.
3 Would voters have a greater incentive to vote in an election in which there were only a few registered voters or in one in which there were many? Why? Why might a Republican label her opponent too
2 James Buchanan said that, “If men should cease and desist from their talk about and their search for evil men and commence to look instead at the institutions manned by ordinary people, wide
1 Some observers maintain that not all politicians move toward the middle of the political spectrum to obtain votes.They often cite Barry Goldwater in the 1964 presidential election and George
3 Using the following data, prove that pollution permits that can be bought and sold can reduce pollution from 12 units to 6 units at lower cost than a regulation that specifies each of the three
2 Graphically represent:a. A corrective tax that achieves the socially optimal output.b. One that moves the market output farther away from the socially optimal output than was the case before the
1 Graphically portray:a. A negative externality.b. A positive externality.
15 Identify each of the following as an adverse selection or a moral hazard problem:a. A person with car insurance fails to lock his car doors when he shops at a mall.b. A person with a family
14 Why is it cheaper to reduce, say, air pollution through market environmentalism than through government standards and regulations?
13 Economists sometimes shock noneconomists by stating that they do not favor the complete elimination of pollution.Explain the rationale for this position.
12 One view is that life is one big externality: Just about everything someone does affects someone else either positively or negatively. To permit government to deal with externality problems is to
11 Name at least five government-provided goods that are not nonexcludable public goods.
10 Some individuals argue that with increased population growth, negative externalities will become more common, and there will be more instances of market failure and more need for government to
9 Give an example of each of the following:a. A good rivalrous in consumption and excludable.b. A good nonrivalrous in consumption and excludable.c. A good rivalrous in consumption and
8 Identify three activities that generate negative externalities and three activities that generate positive externalities.Explain why each activity you identified generates the type of externality
7 People have a demand for sweaters, and the market provides sweaters. There is evidence that people also have a demand for national defense, but the market does not provide national defense. Why

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