In the ________________ of externalities, the market equilibrium is ______________ efficient because it maximizes the net social benefit.
a. absence; ecologically
b. presence; ecologically
c. absence; economically
d. presence; economically
e. absence; environmentally
Ans: c. absence; economically
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If the consumption function is defined as C = 7,250 + 0.8Y, what is the value of the multiplier?
A) 0.2 B) 0.8 C) 1.25 D) 5
The replacement ratio measures
a) The number of people in work who could be made redundant without affecting the size of the economy b) The number of people in employment relative to those unemployed c) the benefits available relative to wages that could be earned d) The number of people voluntarily unemployed
The unemployment rate may:
A. understate the effect of a recession on employment because some leave the labor force. B. overstate the effect of a recession on employment because some leave the labor force. C. understate the effect of a recession on employment because many enter the labor force. D. overstate the effect of a recession on employment because many enter the labor force.
According to the quantity equation, if M increases by 3 per cent and V increases by 2 per cent, then:
A. real income increases by approximately 5 per cent. B. the price level increases by approximately 5 per cent. C. the nominal interest rate increases by approximately 5 per cent. D. nominal income increases by approximately 5 per cent.