In the United States, currency in circulation is the largest component of the M1 money supply
a. True
b. False
Indicate whether the statement is true or false
False
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Chuck Stake never eats vegetables, although he can afford to buy them. According to the economic way of thinking, Chuck
A) must have a serious physiological aversion to vegetables. B) was probably forced to eat them as a kid, and now hates them. C) believes the additional benefits from eating vegetables are outweighed by the additional costs. D) has studied economics enough to know that nobody needs to eat their vegetables.
By the end of the 1960s, fiscal activism was falling out of favor due to its long ________ lag and, as predicted by the permanent-income hypothesis, the ________ of the 1968 tax surcharge
A) legislative, ineffectiveness B) legislative, overstimulation C) effectiveness, ineffectiveness D) effectiveness, overstimulation
A monopolist can earn an economic profit only when:
a. marginal cost equals marginal revenue. b. marginal cost equals price. c. average total cost is less than price. d. all of these.
Pedro, who knows nothing about construction, paid Benito to remodel a room in his house. Two years later, one wall in the remodeled room crumbled because Benito used poor-quality materials. This illustrates which economic problem?
a. adverse selection b. screening c. moral hazard d. signaling