If production of a good creates negative externalities, then the market
a. will under produce it
b. will over produce it
c. must be perfectly competitive
d. must be constrained by barriers to entry
e. will produce the most efficient quantity
B
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If a currency rapidly depreciates, what are the possible negative results to the economy of using contractionary monetary policy to address the depreciation?
What will be an ideal response?
If businesses become very pessimistic and reduce spending, which of the following is the most likely in the short run?
a. An increase in output, an increase in money demand and an increase in the interest rate. b. A decrease in output, an increase in money demand and an increase in the interest rate. c. A decrease in output, a decrease in money demand and a decrease in the interest rate. d. An increase in output, a decrease in money demand and a decrease in the interest rate. e. A decrease in output, a decrease in money demand and an increase in the interest rate.
The existence of profit in a perfectly competitive industry means that:
a. new producers will seek to enter the industry. b. consumers will switch to substitute goods. c. each producer is charging a different price. d. the current price exceeds marginal cost.
What are two ways in which long-term economic growth is measured?
What will be an ideal response?