If the quantity desired of something exceeds the amount available at zero price, that item is called
A. a bad.
B. capital.
C. an intangible good.
D. an economic good.
Answer: D
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Four stores have a problem with theft and security is a public good. Let S stand for the number of person-hours of security patrols per week. The marginal benefit of security patrols to each of the stores is given by the formula MB = 200 - 2S. Patrols cost $20 per hour. What is the socially efficient level of security?
A. 90 person-hours of patrols per week B. 100 person-hours of patrols per week C. 92.5 person-hours of patrols per week D. 97.5 person-hours of patrols per week
From one year to the next, a country's output rose from 4000 to 4500, its capital stock rose from 10,000 to 12,000, and its labor force declined from 2000 to 1750. Suppose aK = 0.3 and aN= 0.7
(a) How much did capital contribute to economic growth over the year? (b) How much did labor contribute to economic growth over the year? (c) How much did productivity contribute to economic growth over the year?
Money does not solve the double coincidence of wants problem unless it is generally acceptable
a. True b. False Indicate whether the statement is true or false