The gains from trade include:
i. lower prices from competition
ii. greater output from specialization
iii. greater variety of goods and services available
A) ii only
B) i and iii only
C) i and ii only
D) i, ii, and iii
E) ii and iii only
D
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To the corporation, bonds are riskier than stocks because
A. interest rates fluctuate. B. bond interest requires that firms make a fixed payment. C. investors prefer stocks to bonds. D. speculators manipulate bonds more than stocks.
In the short-run macro model, if firms produce more output than they sell, those firms will
a. increase the prices of their products b. decrease their output c. increase their output d. cut back on their consumption spending e. increase the prices of their products and reduce the amount of output they produce
Suppose the United States unexpectedly decided to pay off its debt by printing new money. Which of the following would happen?
a. People who held money would feel poorer. b. Prices would rise. c. People who had lent money at a fixed interest rate would feel poorer. d. All of the above are correct.
If the marginal benefit of reducing water pollution is constant at $10 per ton, then it is efficient to reduce water pollution:
A. to zero. B. until the marginal cost of reducing water pollution equals $10 per ton. C. as long as the marginal cost of reducing water pollution is greater than $10 per ton. D. to whatever level the market determines.