The link between the money supply and prices is strongest in:
A. a boom.
B. the short run.
C. a recession.
D. the long run.
Answer: D
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Refer to Negative Externality. Suppose there is no attempt to internalize the externality. Pigovian analysis indicates that the externality creates a deadweight loss equal to
The following questions refer to the accompanying diagram, which shows the effects of a negative externality created by an industry's production. The equilibrium quantity in the absence of any attempt to internalize the externality is QE, and the optimal quantity according to a Pigovian analysis is QO.
a. area C + D + E + G + H.
b. area D + E + H.
c. area C + D + G + H.
d. area E.
Ten cases of spring water are sold for $6 each, and the marginal product of the last unit of labor is 5 . If the price of a case increases from $6 to $8, then the marginal revenue product of the last unit of labor would
a. decrease by $10. b. increase by $40. c. decrease by $30. d. increase by $10. e. not change.
All of the following are examples of positive statements EXCEPT:
A. Tax revenues increase as output per person increases. B. As output per person increases access to consumer goods increases. C. Growth in an economy generates a budget surplus. D. High rates of economic growth are undesirable because of the destruction caused to the environment.
A decline in domestic output would cause a ________ in net exports and a ________ in the exchange rate.
A. rise; rise B. rise; fall C. fall; rise D. fall; fall