Which of the following is a necessary condition for a budget surplus in an economy?
a. Public saving must be positive
b. Net taxes must be positive.
c. National saving should be positive.
d. Household saving must be positive.
a
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If you purchased a newly issued 30-year bond from Google with a face value of $3,000 and a coupon payment of 6 percent, Google would pay you
A) $180 per year for 30 years plus $3,000 at the end of the 30th year. B) $100 per year plus 6 percent per year for 30 years. C) $100 per year for 30 years plus $3,000 at the end of the 30th year. D) $180 per year for 30 years.
Moral hazard is more likely to arise when:
A. one side of an economic relationship cannot observe the behavior of those on the other side. B. adverse selection is present. C. insurance policies have high deductibles. D. people are uninsured.
Prices above the free market equilibrium price are inefficient because the willingness to pay by someone to consume an additional unit ________ the marginal cost to someone for producing that unit.
A. exceeds B. is less than C. equals D. None of these; efficiency is defined in terms of natural resources, not market equilibrium.
Entrepreneurs are unnecessary in a market economy, and their profit is unearned.
Answer the following statement true (T) or false (F)