Water pollution from pulp and paper mills harms plants, animals, and humans. This is an example of
a. a market failure caused by an externality.
b. a market failure caused by market power.
c. a market failure caused by equality.
d. There is no market failure in this case.
a
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The cure for inflation can come only from changes on the demand side
a. True b. False Indicate whether the statement is true or false
A manufacturing company is thinking about building a new factory. The factory, if built, will yield the company $300 million in 7 years, and it would cost $220 million today to build. The company will decide to build the factory if the interest rate is
a. no less than 4.53 percent. b. no greater than 4.53 percent. c. no less than 5.81 percent. d. no greater than 5.81 percent.
From September 2007 to April 2008 the Fed lowered the federal funds rate from 5.25 percent to 2 percent in a series of steps. The Fed's actions were largely in response to:
A. threats to the financial system from the mortgage default crisis. B. forecasts of higher inflation rates. C. Chinese refusal to allow their exchange rate to reflect market conditions. D. pressure from the president to offset contractionary effects of a tax increase.
All else the same, when real GDP increases, the
A) supply of money decreases. B) demand for money increases. C) supply of money increases. D) demand for money decreases. E) supply of money does not change, and the demand for money does not change.