Refer to the graph shown. If the marginal cost external to the trade associated with the use of gasoline is $0.10 per gallon, the point on the graph corresponding to the efficient quantity and price is:
A. K.
B. L.
C. H.
D. G.
Answer: A
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If you invest in a foreign company by buying 8 percent of its shares of stock, you have engaged in
A) moral hazard. B) foreign direct investment. C) portfolio investment. D) adverse selection.
Robert and Janet are discussing unemployment and inflation in their country. Robert, on the basis of a recent newspaper report, claims that a 5% reduction in unemployment will lead to a 2% rise in inflation
On the other hand, Janet insists that inflation is a far bigger problem than unemployment and should be addressed with prime importance. Classify Robert's and Janet's statements as descriptive or advisory. Explain your answer.
In today's Fed, its primary strategy is to
a. target the federal funds rate in the short-run, target inflation in the long-run. b. target inflation c. target the money supply. d. target the federal funds rate in the short-run, balance inflation and output goals in the long-run.
Transfer payments are included in which category under the expenditure approach to GDP accounting?
a. consumption b. government purchases c. net exports d. Transfer payments are not directly included in GDP calculations.