Most economists believe that price indices:
A. overstate inflation and understate growth in nominal GDP.
B. overstate inflation and understate growth in real GDP.
C. understate inflation and understate growth in nominal GDP.
D. understate inflation and understate growth in real GDP.
Answer: B
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Answer the following statement(s) true (T) or false (F)
1. According to the cost-effectiveness criterion, all polluting sources would abate pollution up to the point where their individual abatement levels were equal. 2. According to the cost-effective abatement criterion, all polluting sources would abate pollution up to the point where their individual total abatement cost (TAC) levels were equal. 3. If the MACs for firm 1 and 2 are: MAC1 = 0.4A1 and MAC2 = 0.8A2, respectively, and the combined abatement standard is 15 units, then the cost-effective abatement levels are 10 units for firm 1 and 5 units for firm 2. 4. Suppose the combined abatement standard is set at 22 units and firm J and firm K have MAC functions of MACJ = 0.5A, and MACK = 0.75A, respectively. If firm J is abating 10 units and firm K is abating 12 units, firm K should abate more units and firm J should abate less.
Which of the following is necessary for efficient markets?
A) Positive externalities B) Negative externalities C) Pecuniary externalities D) Free-riding
Since it does not have to be converted into anything else to make purchases, ________ is the most liquid asset
A) money B) stock C) artwork D) gold
If the elasticity of labor supply is positive, the labor-supply curve would be
A. vertical. B. horizontal. C. downward sloping. D. upward sloping.