Consumer groups tend to lobby for
A) price floors.
B) price ceilings.
C) quantity quotas.
D) taxes.
B
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Suppose the nominal interest rate is 15% and the rate of inflation is 3%. The real interest rate is therefore
A) 3%. B) 5%. C) 12%. D) 18%.
When does a private solution to a negative externality fail to allocate resources efficiently?
What will be an ideal response?
Which of the goals pursued by policymakers in an open economy is desirable because it reduces the uncertainty of conducting economic activity across borders?
A) exchange-rate stability B) monetary policy independence C) free capital flows D) appreciation of the domestic currency