When beneficial externalities are present in a market, the actual output will be
a. greater than the optimal output.
b. smaller than the optimal output.
c. equal to the optimal output.
d. either smaller or greater than the optimal output.
b
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Suppose there are 50 million persons in the population, 25 million persons in the civilian labor force, and 20 million persons are employed. The number of persons unemployed is _______ million and the unemployment rate is ___________ percent
A) 25; 50 B) 5; 10 C) 5; 20 D) 10; 10
Quantitative easing (QE) differs from the normal use of open market operations in that it
A. involves the selling of securities. B. targets short-term interest rates. C. targets long-term interest rates. D. involves the buying of securities.
An indirect effect of an increase in the price level works through
A) changes in trade balances as domestic goods become more expensive, causing interest rates to move in the opposite direction from the change in the exchange rate. B) interest rates as people save more as the higher prices make their money balances less attractive. C) people substituting out of domestic goods and into foreign goods as exchange rates rise. D) interest rates as people borrow to maintain their money balances, bidding up interest rates and reducing total planned real expenditures.
Lou buys a Star Wars: The Force Awakens poster at a garage sale for $30 and resells it on eBay to Kyle for $60. Which of the following statements is true?
A) The transaction is economically inefficient. B) The transaction has made Lou and Kyle better off. C) The transaction has made Lou better off and Kyle worse off. D) It is not possible for Kyle to enjoy any consumer surplus from this transaction.