The absence of money illusion means that
A) as real income doubles, the demand for money doubles.
B) as interest rates double, the demand for money doubles.
C) as the money supply doubles, the demand for money doubles.
D) as the price level doubles, the demand for money doubles.
D
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According to Pigovian analysis, when is a tax necessary to improve the market's economic efficiency?
a. When high transactions costs prevent private bargaining. b. When the social marginal cost of production exceeds the private marginal cost. c. When consumption of the good creates external benefits for others. d. When at the competitive equilibrium, the social marginal benefit of the good equals its social marginal cost.
Economic freedom provides the
A) political system that encourages democracy. B) necessary alternative to free markets. C) social system that supports families. D) incentive system that encourages growth-producing activities. E) production system that discourages property rights.
Figure 5-17
In Figure 5-17, which of the marked points would an economist use to help him construct a single demand curve for X?
A. A and B B. C and D C. A and C D. A and D
The _____ of using the market for corporate control make it important to build incentives into executive pay packages that can reduce _____ by better aligning the incentives of shareholders and managers
a. benefits; principal/agent problems b. costs and uncertainties; principal/agent problems c. benefits; influence costs d. costs and uncertainties; influence costs