The only circumstance under which a factor will earn no rent is when the factor's supply curve is
a. vertical.
b. upward sloping.
c. perfectly horizontal.
d. kinked.
c
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Do policy makers know the exact value of the fiscal multiplier?
a. No, economists have almost no idea of the value of fiscal multipliers. b. No, they are not known with complete accuracy. c. Yes, economists know the precise value of the multiplier. d. Yes, although there is a very small range of uncertainty in the value.
The economic explanation that is given by Nobel laureate economist Ronald Coase for why community property is polluted more often than private property is that
A. people ignore what is not right in front of them. B. damaging private property indirectly affects individuals' wealth, whereas damaging community property directly affects their wealth. C. people are not made aware of their actions toward community property. D. damaging community property indirectly affects individuals' wealth, whereas damaging private property directly affects their wealth.
If Japanese tourists visit Yellowstone Park, what is the effect in the foreign-exchange market?
A. It will increase demand for U.S. dollars. B. It will decrease demand for U.S. dollars. C. It will increase supply of U.S. dollars. D. It will decrease supply of U.S. dollars.
In most cases, expenditure-switching policies must be accompanied by expenditure-reducing policies because
A) expenditure-switching policies are completely ineffective without expenditure-reducing policies. B) inflation ensues as home country domestic expenditures switch away from foreign goods to domestic goods unless overall expenditures are reduced. C) inflation abroad may increase the demand for domestic goods, causing inflation to rise. D) the depreciation in the exchange rate may decrease the domestic price of foreign goods, causing an increase in the current account deficit.