Suppose a new law imposes a tax on all trades of bonds and stock. What is the likely effect on money demand?
A. The overall effect is ambiguous.
B. Money demand declines first, then rises when inflation increases.
C. Money demand rises.
D. Money demand declines.
Answer: C
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What is intellectual property?
A. The power of the mind to create new ideas for future use B. The ability to use technology to solve problems. C. Ideas that are legally protected from being used by others. D. The ability of individuals to use their mind to solve real-world problems.
Refer to Figure 7.1. Suppose that instead of $350, Angus earns only $250 by playing the bagpipes, but all other earnings remain the same. Who values the property rights to the air more?
A) Angus B) Dudley C) They value the property rights equally. D) Neither value the property rights.
If the manager of a nonprofit enterprise sets prices below market clearing levels, she
A) increases the net revenue of the enterprise. B) provides herself with control over a valuable good. C) reduces her personal popularity. D) produces all of the above consequences.
Financial securities that represent partial ownership of a corporation are known as
A) bonds. B) stocks. C) coupons. D) dividends.