A year-long drought that destroys most of the summer's crops would be considered a:
A. short-run supply shock.
B. long-run demand shock.
C. long-run supply shock.
D. short-run demand shock.
Answer: A
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The behavior of people in government
A) can be explained or understood by applying the same principles we use to predict the behavior of people in business. B) is different from the behavior of people in business because the former aims at the general welfare rather than private welfare. C) is essentially different from market behavior. D) is not compatible with the existence of a market system. E) serves to balance private-sector behavior.
Inflation is defined as
A) the rate of increase in the government budget deficit. B) the increase in the money supply. C) the rate of change in the average level of prices. D) the nominal interest rate minus the price level.
Which of the following is an example of a pure public good?
A. An automobile B. A mall C. A teddy bear D. An army
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point F
A. is efficient and attainable. B. cannot be produced with the current state of technology. C. represents underallocation of resources. D. represents what the people want.