If the money supply increases this will cause the interest rate to rise, investment to fall and GDP to fall
a. True
b. False
Indicate whether the statement is true or false
False
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Which of the following is an implication of the Coase Theorem?
A) Bargaining cannot lead to an efficient allocation of resources. B) Government intervention is not always necessary to solve externality problems. C) Negotiation leads to an efficient outcome if transaction costs are high. D) Taxation leads to an efficient allocation of resources regardless of who holds the property rights.
Why is a monopsony a negative situation for a worker?
a. Wages are lower than in a competitive labor market. b. Their workplace is not in a convenient location. c. Increased hiring causes workplace overcrowding. d. They have better options for employment nearby.
The extra cost that results from carrying out one additional unit of an activity is the ________ of the activity.
A. marginal benefit B. reservation cost C. marginal cost D. opportunity cost