An economy is considered to be in a recession if:
a. real GDP has declined for two consecutive quarters.
b. it is moving from the peak toward the trough of the business cycle.
c. it is moving from the trough to the peak of the business cycle.
Ans: a. real GDP has declined for two consecutive quarters.
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Robert got a new job and relocated to a different city. He initially decided to rent a small apartment close to his office
However, he decided to live in a much bigger and costlier apartment when he found out that his employer will pay him a house rent allowance. This is an example of ________. A) adverse selection B) moral hazard C) the prisoners' dilemma D) the free-rider problem
In a monopsonistic labor market, workers are paid a wage
a. below their MRP b. equal to the intersection of MRP and S c. equal to the MLC d. equal to the price of the output e. above their MLC
Which of the following statements about the national debt has the most validity?
a. Our large national debt can bankrupt the nation. b. If only Americans hold the debt, then payments of interest and principal are simply transfers from some Americans to other Americans. c. Our large national debt can lead to subjection by the people (especially foreigners) who hold the debt. d. The national debt represents a burden to future generations who will have to make huge payments of interest and principal.
Which one of the following is normally the cheapest way to address water shortages?
a. Expanded development of groundwater aquifers b. Desalination c. Building dams d. Water conservation efforts e. Creating a system of property rights