Which of the following is most likely to reduce the consumption of an exhaustible natural resource?
A. A decrease in monopoly control of the market for the resource
B. Government tax policies that give tax breaks to entrepreneurs who search for new reserves of the resource
C. Implementation of a price ceiling for the resource below its equilibrium price
D. Government macroeconomic policies that lower the interest rate on bonds
Answer: C
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Refer to Figure 2.1. What is the opportunity cost of increasing production of manufactured products from 500 tons to 600 tons per year?
A) 200 tons of agricultural products per year B) 400 tons of agricultural products per year C) 500 tons of agricultural products per year D) 600 tons of agricultural products per year
Refer to Figure 16-6. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely pursue
A) contractionary fiscal policy. B) expansionary monetary policy. C) expansionary fiscal policy. D) expansionary automatic stabilizers. E) contractionary monetary policy.
The international capital market is:
A) the international currency exchange. B) a market in which capital assets are exchanged for services. C) the market that is subject to intense regulation and must file a report to the Basel committee on a biannual basis. D) not really a single market, but a group of closely interconnected markets in which asset exchanges with some international dimension take place. E) an organization of fiscal policies that dictate international trade.
Answer the following statements true (T) or false (F)
1) 1 + MPS = MPC. 2) The slope of the consumption schedule is measured by the MPC. 3) A decline in the real interest rate will shift the investment demand curve to the right. 4) A specific investment will be undertaken if the expected rate of return, r, exceeds the interest rate, i. 5) Investment is highly stable; it increases over time at a very steady rate.