Your favorite holiday is Halloween and each year you decorate your yard with pumpkins, skeletons, and tombstones, and you install a noise machine which blasts haunting sounds 24 hours a day. It is such a spectacle that hundreds of people drive by your house each day to gawk at the display. The noise and traffic disturb your neighbors who sue you, and you are required to take down your display permanently. This is an example of
A. the free-rider problem.
B. a liability rule.
C. the Coase theorem.
D. an injunction.
Answer: D
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If the asset market is to remain in equilibrium, then if the money supply increases, output is unchanged, the price level is unchanged, and the expected inflation rate is unchanged, then
A) the real interest rate must rise. B) the real interest rate must decline. C) the nominal interest rate must rise. D) the inflation rate must rise.
Which of the following could cause a long-run shift in demand as part of the "guiding function of price"?
A) a change in tastes and preferences B) an increase in price caused by a shift in supply C) income shift caused by an economic recession D) an increase in number of buyers
_______ ensure that resources are allocated to where they are most highly valued
a. Communist governments b. Consumers c. Suppliers d. Non-governmental organizations e. Markets
The highest-income fifth of the U.S. population earns more than 50 percent of all income
a. True b. False Indicate whether the statement is true or false