The Coase Theorem asserts that government intervention is a prerequisite for addressing externality problems
Indicate whether the statement is true or false
FALSE
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The economy is at the equilibrium shown as point a in the above figure. To restore the economy to potential GDP, the Fed should
A) buy government securities and thereby increase aggregate supply. B) sell government securities and thereby decrease aggregate demand. C) buy government securities and thereby decrease aggregate demand. D) buy government securities and thereby increase aggregate demand. E) sell government securities and thereby increase aggregate demand.
Which of the following is a macroeconomics topic?
a. wages of textile workers in the Northeast b. the cost of producing 10,000 bookcases c. the economy's annual growth rate d. market demand for fish e. effects of farm subsidies on food prices
A government currently uses price controls to hold down the price of zinc, an exhaustible resource. If price controls are removed,
A. production of zinc will probably fall. B. zinc mines with high marginal cost of production will probably stop producing. C. consumers of zinc will probably want substitutes for zinc. D. income will probably be redistributed from zinc producers to zinc consumers.
Investment depends on the ________ interest rate because higher inflation will ________ the value of the dollars with which the firm will repay the loan.
A. real; increase B. nominal; increase C. real; decrease D. nominal; decrease