When a good is not easily excludable, what people pay for it will:
A. reflect the real value they place on it.
B. exactly equal the social benefit of the good.
C. not necessarily reflect the real value they place on it.
D. be greater than the social benefit of the good.
C. not necessarily reflect the real value they place on it.
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If a person expects the price of pumpkins to increase next month, then that person's current demand for pumpkins will increase
a. True b. False Indicate whether the statement is true or false
The money supply decreases if the Fed
a. sells Treasury bonds. The larger the reserve requirement, the larger the decrease will be. b. sells Treasury bonds. The smaller the reserve requirement, the larger the decrease will be. c. buys Treasury bonds. The larger the reserve requirement, the larger the decrease will be. d. buys Treasury bonds. The smaller the reserve requirement, the larger the decrease will be.
Which of the following is a major implication of the invisible hand concept?
a. When directed by competitive market prices, the actions of self-interested individuals will tend to promote overall economic prosperity. b. Prosperity cannot be achieved unless the selfish nature of people can be changed. c. Competition is harmful to the health of an economy because it results in wasteful duplication. d. Government-operated firms tend to have lower costs than private sector firms.
As the MPS decreases, the multiplier will
A. decrease. B. increase. C. remain constant. D. either increase or decrease depending on the size of the change in investment.