If the government created a surplus of an agricultural product due to price supports, how might they dispose of this surplus?
A. have the farmer destroy the crop
B. purchase it and store it away
C. give it away to a foreign country
D. Any of these answers might be a successful tool in disposing of agricultural surpluses.
Answer: D
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Which of the following is the best example of an action that imposes an external cost?
a. Wear and tear on your car as the result of frequent use. b. Deterioration in the average quality of a house you own as the result of poor maintenance. c. Water pollution from an upstream factory that increases the cost of providing clean water to downstream residents. d. A rose garden on your property from which your neighbor gets much enjoyment.
The main issues that macroeconomic studies are
a. interest rates, jobs, and government policies. b. production, costs, and benefits. c. economic growth, unemployment, and inflation. d. choices made by household and businesses.
The concept of aggregate supply is a
a. fixed number. b. schedule. c. predetermined amount of output. d. All of the above are correct.
Suppose that velocity and output are constant and that the quantity theory and the Fisher effect both hold. What happens to inflation, real interest rates, and nominal interest rates when the money supply growth rate increases from 5 percent to 10 percent?