A general rule is that economy is experiencing a recession when:
a. real GDP declines for at least three months.
b. real GDP declines for at least nine months.
c. nominal GDP declines for at least nine months.
d. real GDP declines for at least six months.
e. nominal GDP declines for at least six months.
d
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An example of an externality occurs when a chemical factory
A) is producing ethanol and dumps waste in a river upstream from a popular fishing spot. B) produces fertilizers that do not help plants grow. C) produces fertilizers that kill plants rather than feed them. D) overworks its employees.
Refer to Figure 4-5. With rent control, the quantity supplied is Q1. Suppose apartment owners ignore the law and rent this quantity for the highest rent they can get. What is the highest rent they can get?
A) R1 B) R0 C) more than R1 D) R*
An example of moral hazard is
a. A taxi driver paid per mile taking the shortest route b. a piece-rate garment worker shirking less than a per hour worker c. an hourly salesman working harder than a commission salesman d. an author on contract going to as many book signings as one with a percentage royalty rate
If a private market determines the quantity of smallpox vaccinations, which of the following is true?
a. The equilibrium quantity is too low for efficiency. b. The equilibrium price and quantity are too high for efficiency. c. The equilibrium price is efficient. d. The equilibrium quantity is too high for efficiency. e. The equilibrium price and quantity are efficient.