Monetary policy involves altering the quantity of money and thus affecting the level of interest rates and the extent of borrowing in an economy
a. True
b. False
Indicate whether the statement is true or false
True
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Classical economists believed that
a. the government should play an active role in controlling the economy b. the government can best help the economy by leaving it alone c. the economy is controlled by the government d. laissez faire will hurt the economy e. economists should offer guidance to governmental leaders
In competitive price-searcher markets, short-run economic profits will lead to
a. long-run economic profits. b. the exit of firms from the market and the eventual restoration of zero long-run economic profits. c. the entry of additional firms into the market and the eventual restoration of zero long-run economic profits. d. the entry of additional firms into the market, which increases the demand for the product of each firm in the market.
Which of the following is an example of market failure?
A. Negative externalities. B. Positive externalities. C. Public goods. D. All of these.
People in a certain group have a 0.3% chance of dying this year. If a person in this group buys a life insurance policy for $3,300 that pays $1,000,000 to her family if she dies this year and $0 otherwise, what is the expected value of a policy to the insurance company?
A) $0 B) $300 C) $3,000 D) $3,300