In an economy in which velocity is constant and real output grows at an average rate of 4 percent per year, a 4 percent average rate of growth in the money supply would result in:
a. a constant price level
b. a slowly increasing price level.
c. a rapidly increasing price level.
d. constant real GDP.
e. constant nominal GDP.
a
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At the current price of a good Al's consumer surplus equals 8 and Ben's consumer surplus equals 15. By using two-part pricing a monopolist could increase his profit by
A) 8. B) 16. C) 15. D) 30.
The Lorenz curve
A. shows what portion of the population are living in poverty and what portion are living in wealth. B. breaks down the income levels of each group in the economy. C. shows what portion of total money income is accounted for by different proportions of the nation's households. D. shows what portion of the population is working as professionals, white- and blue-collar, workers and workers at menial tasks.
Central banks can improve the welfare of a society by doing all of the following except:
A. focusing on keeping the overall level of prices stable. B. serving the interests of government rather than the public at large. C. helping to reduce the volatility of business cycles. D. helping to promote economic growth.
Governments usually build highways because it is difficult to exclude individuals who don't pay for the highways from using them. What type of market failure is involved?
A. Market power. B. Public goods. C. Externalities. D. Inequity.