Positive externalities are created when
A) other consumers reduce their demand for coffee and price thereby declines.
B) farmers spray pesticide in their fields and it washes into the local river after the first rainstorm.
C) your neighbor plants beautiful trees and flowers in her yard.
D) you purchase the "Mona Lisa" and lock it in a vault.
C
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If nominal GDP for 2009 is $6400 billion and real GDP for 2010 is $6720 billion (in 2009 dollars), then the growth rate of real GDP is
A) 0%. B) 0.5%. C) 5%. D) 50%.
Which of the following statements is an example of confusing association and causation?
A. Senator Jones believes that more tax revenue should be distributed to the poor. B. A map includes roads, but not every restaurant, telephone pole, and C. Interest rates rise when it rains, all other factors constant. D. When the price of Coca-Cola increases, consumers buy more Pepsi, all other factors constant.
Which of the following statements is FALSE?
A) Economists empirically test their models. B) Economic models are not used to make predictions. C) An economic model should capture only the key relationships that are sufficient to analyze the particular problem being studied. D) Economic models relate to behavior rather than to individual thought processes.
There is a strong link between changes in the money supply and inflation
A) in both the short run and the long run. B) in neither the short run nor the long run. C) in the short run, but not in the long run. D) in the long run, but not in the short run.