If a country devotes its resources to acquiring more physical capital it will:
A. decrease its output per person.
B. increase its productivity.
C. increase its current consumption.
D. All of these are true.
Answer: D
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The ways to address agency costs include all EXCEPT
a. running background checks on prospective employees b. hiring only from job fairs c. spot checks of the quality of employee work d. replacing closed offices with cubical office spaces
A tax on cigarettes will have the effect of properly dealing with the externality unless the tax
A. is so high that it generates a black market. B. causes people to use smoke less. C. is lower than the marginal external costs. D. is lower than the marginal external costs, or it is so high that it generates a black market.
Refer to Figure 1.7. Which of the following points are considered to be inefficient?
A. E. B. D, G, and J. C. D. D. G.
"Depression means idleness. And idleness means loss of skills, loss of self-respect, plummeting morale, family disintegration, and sociopolitical unrest." This quote describes some of the:
A. Consequences of the hyperinflation that accompanies a recession B. Reasons for the natural rate of unemployment C. Noneconomic costs of unemployment D. Characteristics of structural unemployment