Explain what social overhead capital is
What will be an ideal response?
This is represented by basic infrastructure projects such as roads, power generation, and irrigation systems.
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A nation will import a good if its no-trade, domestic
A) price is equal to the world price. B) price is less than the world price. C) price is greater than the world price. D) quantity is less than the world quantity. E) quantity is greater than the world quantity.
An argument in favor of fractional-reserve banking is that
A) unregulated institutions would be riskier than regulated fractional-reserve banks. B) it increases the precision of the central bank's control over the quantity of money. C) a bank deposit is owned by the depositor, so the bank has no legal right to lend the deposit to someone else. D) it decreases the risk of a bank running out of cash.
Which of the following is a characteristic of monopoly in the long run?
A) The firm makes zero economic profit. B) The firm can make an economic profit. C) Price equals marginal cost. D) Price equals marginal revenue.
The narrowest official definition of the money supply is
A) M1. B) M2. C) M3. D) L.