Explain which of the following items are not capital goods:
What will be an ideal response?
• An auto assembly line
An auto assembly line is a capital good.
• A shopping mall
A shopping mall is a capital good.
• A golf ball
A golf ball is not a capital good. It is a consumption good.
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The above table shows the distribution of income and wealth in Miseria. What percent of income is earned by the richest 40 percent of the population?
A) 20 percent B) 30 percent C) 55 percent D) 70 percent
A large farming operation which uses a potent fertilizer is located up river from a trout farmer. If property rights of the river exist and transactions costs are low, the amount of pollution will be ________
A) efficient only if the trout farmer owns the river B) inefficient if the farming operation owns the river C) efficient if either the farming operation or the trout farmer own the river D) always inefficient
An individual who arranges for buyers and sellers to exchange securities and earns a commission in return is a
A) dealer. B) auctioneer. C) broker. D) underwriter.
Using the cash balance version of the quantity theory with k = .2, an increase in the money supply of $100 billion leads to an increase in GDP of
A) $500 billion. B) $100 billion. C) $50 billion. D) $20 billion.