When external costs exist,
A. Market prices do not convey the full costs of production.
B. Private costs are greater than social costs.
C. There is government failure.
D. The market achieves the optimal mix of output.
Answer: A
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Assuming no bequests, with a real rate of interest of 10 percent, wealth of $60,000, current income of $70,000, future income of $180,000 and future consumption of $158,000, current consumption must equal ________
A) $158,000 B) $150,000 C) $152,000 D) $130,000
State and local governments generate revenue from all of the following sources except
a. sales taxes. b. the federal government. c. corporate income taxes. d. customs duties.
When comparing monetary and fiscal policy under fixed and floating exchange rate regimes, which of the following statements is FALSE?
A) In a floating exchange rate regime, an expansionary monetary policy is effective by stimulating spending and by depreciating the currency. B) In a floating exchange rate regime, an expansionary fiscal policy is effective by stimulating spending, though there may be crowding-out effects due to higher rates of interest and currency appreciation. C) In a fixed exchange rate regime, an expansionary monetary policy is effective by stimulating spending; it has no impact on the currency value or the trade balance. D) In a fixed exchange rate regime, an expansionary fiscal policy is effective by stimulating spending, as long as the parallel expansionary monetary policy keeps exchange rates stable.
In order to calculate the HHI, the government must first define the relevant market.
Answer the following statement true (T) or false (F)