If a sawmill creates too much noise for local residents,
a. noise restrictions will force residents to move out of the area.
b. a sense of social responsibility will cause owners of the mill to reduce noise levels.
c. the government can raise economic well-being through noise-control regulations.
d. the government should avoid intervening because the market will allocate resources efficiently.
c
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The net capital inflow is
a. positively related to the domestic interest rate minus the foreign interest rate. b. negatively related to the domestic interest rate minus the foreign interest rate. c. positively related to the exchange rate. d. negatively related to the exchange rate. e. both a and c.
If the marginal propensity to consume (MPC) decreases, then
A) the marginal propensity to save (MPS) decreases. B) the multiplier decreases. C) the multiplier increases. D) MPC + MPS is less than 1.
Assume that the expectation of a recession next year causes business investments and household consumption to fall, as well as the financing to support it. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the GDP Price Index and the monetary base in the context of the Three-Sector-Model? a. The GDP Price Index rises and monetary base
falls. b. The GDP Price Index and monetary base fall. c. The GDP Price Index falls and monetary base rises. d. The GDP Price Index and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
An individual holds $1,000 in a non-interest-earning checking account, and the overall price level rises significantly. Other things being constant, we would expect
A. the individual's real wealth to decrease and consumption to decline. B. no change in the individual's real wealth but a decline in real national product. C. the individual's stock of real wealth to decrease but real national income to increase. D. the individual's wealth to increase.