When there are external costs of production, such as when electric utilities burn coal, a competitive market will produce an inefficient level of output
Indicate whether the statement is true or false
TRUE
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Which of the following is NOT a characteristic of a perfectly competitive market?
A. Sellers can easily buy and sell the productive resources needed to enter the market. B. Buyers and sellers are well-informed. C. Each firm in the market sells a somewhat different variant of the good. D. There are many sellers, each of which sells only a small fraction of the total quantity exchanged.
The classical theory of inflation:
A. describes a long-run equilibrium. B. explains the direct relationship between money supply and the price level. C. shows neutrality of money in the long run. D. All of these statements are true.
Jim buys a $1000 bond from ABC Company. ABC Company uses the $1000 to purchase a new piece of machinery. Whose spending would be an act of investment in the language of macroeconomics?
a. only Jim's b. only ABC Corporation's c. Jim's and ABC Corporation's d. neither Jim's nor ABC Corporation's
An increase in the real value of stock prices, which is independent of a change in the price level, would best be an example of the:
a. Foreign purchases effect b. Wealth effect c. Interest-rate effect d. Real-balances effect