Which of the following is most likely a private good?
A. The administration of justice.
B. National defense.
C. Sidewalks.
D. Bicycles.
Answer: D
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When the Fisher Effect holds, a one-percentage-point increase in the long-run money growth rate, because it ________ expected inflation, causes ________ in the nominal interest rate in the long run
A) equally lowers, a one-percentage-point decrease B) does not change, a one-percentage point decrease C) does not change, no change D) equally raises, no change E) equally raises, a one-percentage-point increase
Compared to countries with less economic freedom, countries with more economic freedom
a. achieve higher per person income levels, but they also have higher poverty rates. b. grow more rapidly, but the income levels of the poor are largely unaffected by the higher growth rates of the freer economies. c. achieve both higher income levels per person and lower rates of poverty. d. grow less rapidly and experience higher poverty rates.
According to the Keynesian transmission mechanism, an increase in the money supply causes a(n) __________ in the interest rate and a(n) __________ in investment, which in turn causes a(n) __________ in total expenditures and aggregate demand
A) increase; decrease; decrease B) increase; increase; decrease C) decrease; increase; increase D) decrease; decrease; increase
When people face bounded rationality, they are likely to
A. do nothing. B. consider every conceivable choice available to them when making decisions. C. rely on simple rules of thumb. D. behave irrationally.