Government gives subsidies to encourage production of products with beneficial externalities.
Answer the following statement true (T) or false (F)
True
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Consider the above figure. At income level Yd = $110, the APS is equal to
A) -0.36. B) 0.32 C) 0.64. D) 1.10.
When the Fed buys government securities, the immediate effect of the purchase is that banks'
A) reserves decrease. B) loans decrease. C) reserves increase. D) assets increase. E) deposits increase.
Which of the following is an example of a forward contract?
A. A farmer near Ames and a local ethanol plant agree on a price and quantity of corn to be delivered later today. B. A farmer near Ames and Key Co-Op agree on a price and quantity of corn to be delivered 6 months from now. C. A farmer near Ames goes short on a futures contract. D. A farmer in Ames sells corn to a Canadian firm.
Kaneshi Hartfield is a sales representative with Plain Truth Advertising. She is an excellent sales representative, but corporate management feels that she is too independent. But they are afraid to act, since Kaneshi maintains her own list of key contacts. This is an example of
A. an asymmetric information problem. B. the failure of bargaining. C. different time horizons of the sales representative and management. D. the free-rider problem.