Scarcity can best be defined as a situation in which:
A. there are no buyers willing to purchase what sellers have produced.
B. there are not enough goods to satisfy all of the buyers' demand.
C. the resources we use to produce goods and services are limited.
D. there is more than enough money to satisfy consumers' wants.
Answer: C
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When the unemployment rate is less than the natural unemployment rate
A) the output gap is positive. B) the output gap equals zero. C) the output gap is negative. D) None of the above is possible because it is impossible for the unemployment rate to be less than the natural rate.
When calculating GDP, underground economic activity is
A) the production of goods and services in the home. B) that portion of the time when we are enjoying leisure activities and not producing marketable goods. C) the part of the economy purposely hidden. D) an aspect of the quality of life, such as health and life expectancy.
The greater the magnitude of the external costs of production, a. The larger is the deadweight loss from overproduction
b. The greater would be the optimal pollution tax. c. The further the private market solution ignoring those costs would deviate from the socially efficient level of output. d. All of the above are true.
All of the following would be true for the banking system if there was no government regulation except
A. The money supply would be determined by individual banks. B. The banking system would be regulated by consumers. C. The money supply would be subject to abrupt changes. D. Depositors would bear all the risks of bank failures.