In the presence of negative externalities, ________ is produced and in the presence of positive externalities, ________ is produced.
A. too much of the good; the right amount of the good
B. the right amount of the good; too little of the good
C. too little of the good; too much of the good
D. too much of the good; too little of the good
Answer: D
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The price elasticity of demand is defined as the magnitude of the
A) change in quantity demanded divided by the change in price. B) change in price divided by the change in quantity demanded. C) percentage change in quantity demanded divided by the percentage change in price. D) percentage change in price divided by the percentage change in quantity demanded.
If the banking system has demand deposits of $200,000, total reserves equal to $60,000, and a required reserve ratio of 25 percent, the banking system can increase the volume of loans by a maximum of
A. $10,000. B. $60,000. C. $40,000. D. $200,000.
The average price level is equivalent to
A. the price of exports. B. the price of imports. C. the price of a market basket of goods. D. the price of a single good.
According to Say's law
A. desired expenditures cannot be compared with actual expenditures. B. desired production are always more than actual production. C. desired expenditures are always less than actual production. D. desired expenditures are always equal to actual expenditures.