Pollution is an example of:
A. Inefficiency by the polluting firm.
B. Market failure.
C. Government transfers.
D. Economic instability.
Answer: B. Market failure.
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The real rate of interest
A) is equal to the nominal rate when Y equals YN. B) is equal to the nominal rate minus the rate of inflation. C) is equal to the nominal rate plus the rate of inflation. D) is never negative.
Which of the following is correct regarding the discount rate?
a. It is the interest rate that commercial banks charge their most creditworthy customers. b. It is the interest rate that thrift institutions charge for home mortgages c. It is the interest rate at which depository institutions can borrow from the Federal Reserve. d. It is the interest rate set in the market for U.S. Treasury Bills. e. It is the prime interest rate.
Which of the following products has the least elastic demand?
A. Raspberry Mocha Kona coffee blend at Starbuck's B. Starbuck's coffee C. coffee D. all beverages
When an insurance company specifies certain precautions that an insured person must take it is trying to control for moral hazard.
Answer the following statement true (T) or false (F)