When external or spillover benefits occur in the production of a particular product, the private market tends to provide:
A. too much of the product.
B. the socially optimal amount of the product.
C. too little of the product.
D. none of the product.
Answer: C
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During the 1990s, the country of Chile required foreigners wishing to invest in the country to make a one-year, zero-interest deposit in the Chilean central bank equal to at least 20 percent of the investment. This is an example of:
A. a capital outflow control. B. a currency board. C. a capital inflow control. D. an exchange rate mechanism.
Permanent tax changes have a _____ effect on aggregate demand compared to temporary tax changes
Fill in the blank(s) with correct word
Suppose a patent is granted for a product that has the linear demand curve P = a - b Q. The constant marginal cost of producing this product is $50 per unit, a unit sells for $150, and consumers purchase 100 units of the good at that price. If the monopoly is maximizing profit, b equals
A) 1. B) 1.5. C) 2. D) 2.5.
The relation between growth, as measured in ________, is an inverted U.
A. income and expenditure B. human capital and physical capital C. saving and investment D. per capita income and pollution