Based on the graph showing the effects of a government budget deficit, how would a budget deficit affect the equilibrium quantity of loanable funds exchanged?
a. It would create a higher equilibrium quantity of loanable funds exchanged.
b. It would create a lower equilibrium quantity of loanable funds exchanged.
c. It would have no influence on the equilibrium quantity of loanable funds exchanged.
d. It would drive the equilibrium quantity of loanable funds exchanged to zero.
b. It would create a lower equilibrium quantity of loanable funds exchanged.
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What is the shut-down rule for any firm?
Suppose an increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events, the demand for tires
a. decreases, and the supply of tires increases. b. is unaffected, and the supply of tires decreases. c. is unaffected, and the supply of tires increases. d. None of the above is necessarily correct.
Which of the following is an accurate statement about markets?
a. It doesn’t matter what they look like, but rather what they do. b. There is a limited variety of them, and they all do about the same thing. c. They facilitate trade for large companies, but tend to ignore small ones. d. They focus more on the exchange of goods than the exchange of services.
Which of the following is an example of a negative externality?
A) There is an increase in injuries to pedestrians caused by accidents resulting from electronic billboards distracting drivers. B) The opening of a new shopping mall increases the business of nearby restaurants. C) A consumer pays a higher price than another consumer does for the same product. D) Consumers pay a sales tax in addition to the price of a product.