An increase in the money supply that leads to an increase in expected inflation, which in turn leads to an increase in the interest rate, is best described as the
A) liquidity effect.
B) income effect.
C) expectations effect.
D) adaptive expectations theory.
C
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The marginal social benefit is the:
A. benefit gained by the last user. B. sum of the marginal benefit gained by each individual user. C. total benefit gained by the last user. D. sum of the benefit gained by each individual user.
The investors who bought mortgage-backed securities just before the housing bubble burst:
A. were not concerned about the original mortgage. B. were all very comfortable assuming high-risk assets. C. were not confident in the rising home value underlying each mortgage. D. knew exactly what they were buying.
Some authors claim that any point not on the frontier cannot be best. What is their reasoning to support this?
a. A point inside the frontier implies that society is not facing up to the problem of scarcity. b. A point inside the frontier limits growth, and growth is always a goal worth pursuing. c. A point inside the frontier represents inflation, and inflation is a dangerous situation. d. A point inside the frontier results in fewer goods, and more is always better. e. A point inside the frontier is inefficient, and represents wasted resources.
The elements of the federal budget not determined by past legislative or executive commitments are
A. Fiscal restraint items. B. Discretionary fiscal spending. C. Uncontrollable fiscal spending. D. Automatic stabilizers.