An increase in the interest rate will increase the demand for loanable funds
a. True
b. False
Indicate whether the statement is true or false
False
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Because smoking causes illness and disability to smokers, society must maintain more health-service capacity than it would need in the absence of smoking. Since the cost of maintaining this capacity is covered to a substantial degree by health insurance, even nonsmokers must pay higher premiums. Also, smokers hurt nonsmokers as a result of "passive smoke." The Rand Corporation estimates these
costs to be 29 cents per pack of cigarettes. Cigarette taxes average 37 cents per pack. Based on the economist's definition of efficiency, it follows that a. cigarette taxes are too high, and cigarette production is lower than the efficient amount. b. cigarette taxes should be increased until external costs are zero. c. since the tax exceeds the marginal cost, we have a better than efficient outcome. d. we are overconsuming cigarettes.
The fall of actual GDP below the level of potential GDP is a signal that the economy is in a recession
a. True b. False Indicate whether the statement is true or false
A natural experiment always has a control group, which is affected by the policy change, and a treatment group, which is not affected by the policy change.
Answer the following statement true (T) or false (F)
Which of the following is NOT a characteristic of a perfectly competitive long-run equilibrium?
A) Firms are earning zero profits. B) Price equals marginal cost. C) Price equals long-run minimum average cost. D) Firms are producing on the downward sloping portions of their short-run average cost curves.