Under a fixed exchange rate regime, the central bank must act to keep
A) P = P.
B) the real exchange rate fixed.
C) i = i.
D) E = 1.
E) none of the above
C
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The "tragedy of the commons" refers to the phenomenon where
A) there is rivalry in consumption. B) people overuse a common resource. C) people do not internalize an externality. D) individuals are free riders.
Total surplus is
A. the sum of consumer’s surplus plus producer’s surplus. B. the consumer’s surplus minus the producer’s surplus. C. the product price minus the sum of consumer’s surplus and producer’s surplus. D. consumer surplus minus marginal utility of the produce.
If the unemployment rate has reached an all-time low, the production of output is probably
a. high b. low c. fluctuating d. stable e. inefficient
Which of the programs below would not transfer wealth from young to old generations?
a. Taxes are reduced as a result of cutting expenditures on education. b. Taxes are raised to improve government infrastructure such as roads and bridges. c. Taxes are raised to provide more generous Social Security benefits. d. Taxes are raised to provide more generous Medicare benefits.