A liquid asset is
A) an asset that can easily and quickly be sold to raise cash.
B) a share of an ocean resort.
C) difficult to resell.
D) always sold in an over-the-counter market.
A
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Of the four effects on interest rates from an increase in the money supply, the initial effect is, generally, the
A) income effect. B) liquidity effect. C) price level effect. D) expected inflation effect.
A government passes a new law allowing only 1,000 tons of pollution per day to be generated and simultaneously sells 1,000 transferable rights to emit one ton each of pollution per day. Which of the following is true?
a. The pollution will be created by those least willing and able to pay the damages. b. The pollution will be created by those most willing and able to pay for the right to pollute. c. The funds collected by the government will be enough to compensate any individuals harmed by the pollution. d. Pollution will increase from zero to 1,000 units per day. e. There will be no incentive for polluters to try to sneak emissions past government monitoring devices.
Adam and Barb go to the store to purchase some lottery tickets. Without looking at the price, Adam says "I'll take 10 lottery tickets," and Barb says "I'll take $10 worth of lottery tickets.". What is each person's price elasticity of demand for lottery tickets?