The pollution emitted by a power plant is an example of a detrimental externality
a. True
b. False
Indicate whether the statement is true or false
True
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A perfectly competitive firm can continue to earn above-normal profit in the long run
a. if it has a continued technical advantage over other firms in the market and it is able to keep that advantage a secret b. if it has employees that are substantially more efficient than other firms' workers c. if its centralized location reduces its transportation costs below those of other firms d. if it has easier access to necessary raw materials e. under no circumstances
If real GDP stays the same but the price level increases:
A. nominal money demand should increase. B. real money demand should decrease. C. nominal money demand should remain the same. D. nominal money demand should decrease.
Suppose the income elasticity of demand for toys is +2.00. This means that:
A. a 10 percent increase in income will increase the purchase of toys by 20 percent. B. a 10 percent increase in income will increase the purchase of toys by 2 percent. C. a 10 percent increase in income will decrease the purchase of toys by 2 percent. D. toys are an inferior good.
Which of the following did not contribute to the law of diminishing control?
A. Regulations covered fewer financial instruments B. New financial institutions and instruments C. New monetary policy tools D. Political pressure to reduce regulations