When a freely functioning market is in disequilibrium:
a. the government must set a price ceiling.
b. the government must set a price floor.
c. the price and quantities demanded and/or supplied change until equilibrium is established.
d. it will continue to remain in disequilibrium.
e. it will reach equilibrium at a very high/low price.
c
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An example of targeted government spending is its spending on
a. education b. police protection c. national defense d. space exploration e. welfare
Imagine a 2,000-acre park with picnic benches, trees, and a pond. Suppose it is publicly owned, and people are invited to enjoy its beauty. When the weather is nice, it is difficult to find parking, and the trash cans overflow with food wrappers on summer afternoons. Otherwise, it is a great place. The park is a common resource because
a. people can be prevented from using it. b. access is limited due to driving distances. c. if too many people use it, one person's use diminishes other peoples' use. d. anyone can use it without affecting anyone else.
A company’s gearing is
a) the ratio of debt to overall assets b) the ratio of stock market valuation to book value c) the share price divided by corporate earnings d) its stockholder’s equity e) the ratio of taxes paid to the overall wage bill
Suppose that you took out a $1,000 loan in January and had to pay $75 in annual interest. During the year, inflation was 6 percent. Which of the following statements is CORRECT?
A. The real interest rate is 6 percent and the nominal interest rate is 7.5 percent. B. The nominal interest rate is 7.5 percent and the real interest rate is 1.5 percent. C. The nominal interest rate is 7.5 percent and the real interest rate is 13.5 percent. D. The real interest rate is 7.5 percent and the nominal interest rate is 1.5 percent.