Drivers who enter an expressway during the rush hour create negative externalities whenever they
A) could have taken another route.
B) drive under the speed limit.
C) fail to yield as they merge.
D) have no other passengers in their vehicles.
E) inadvertently slow down all the drivers behind them.
E
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Privately-owned firms that accept deposits from individuals and businesses and use those deposits to make loans are called:
A. mortgage banks. B. investment banks. C. brokerage firms. D. commercial banks.
In a simplified banking system subject to a 25 percent required reserve ratio, a $1,000 open-market purchase by the Fed would cause the money supply to:
A. increase by $1,000. B. decrease by $1,000. C. decrease by $4,000. D. increase by $4,000.
When your wages rise, the:
A. opportunity cost of an hour of work decreases. B. opportunity cost of an hour of leisure increases. C. opportunity cost of an hour of leisure stays the same. D. cost of working increases.
Compared to a sampling of other developed nations, the U.S. income distribution is more unequal than many others. What accounts for this?
A. Other nations manipulate their data to look better. B. The lowest-income families in the United States earn much less than the lowest-income households in other nations. C. The highest-income families in the United States earn much more than the highest-income households in other nations. D. Marginal income tax rates are much higher in the United States than in any other nation.