Refer to Figure 9-4. Under autarky, the consumer surplus is area
A) R + S + V. B) S. C) R. D) S + V.
C
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If the Fed decided to target price levels and inflation was lower than its target for a period of time, the Fed would be required to
A) permanently raise inflation above its target to reach and maintain its price level target. B) permanently lower its price level target to align it with the inflation rate. C) temporarily lower its inflation target to match its price level target. D) temporarily raise inflation above its target to reach its price level target.
The owner of a scenic waterfall is trying to decide whether to rent the site to a manufacturing firm as an industrial power source or to rent it to a recreational association, which would turn the site into a park and campground
Which of the following statements is true? A) An increase in the price of fossil fuels will increase the cost of renting it to the recreation association. B) Social welfare is maximized when the owner rents to the higher bidder. C) The cost to the owner of renting to one or the other depends entirely upon the owner's preferences between economic growth and recreational facilities. D) The owner can choose without regard to cost because the site is a free natural resource. E) The owner can choose without regard to cost insofar as the waterfall is privately owned.
If there are external benefits for good X then which of the following would be true?
a. The socially efficient amount of good X can be achieved if society subsidizes consumers of good X. b. The socially efficient amount of good X will be equivalent to the free market equilibrium quantity. c. The socially efficient amount of good X can be achieved if society taxes consumers of good X. d. The socially efficient amount of good X does not exist.
Which of the following is NOT a reason the Fed alters the rate of growth of the money supply?
A. to influence aggregate demand B. to influence the amount of investment C. to influence the amount of consumption D. to shift the demand for money curve