Which of the following is an example of an activity that creates an external cost?
i. a smoker emitting second-hand smoke
ii. sulfur emitting from a smoke stack
iii. throwing garbage on the roadside
A) i only
B) i and ii
C) iii only
D) ii and iii
E) i, ii, and iii
E
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A macroeconomist would study
A) the price changes at K-Mart. B) the cost problems at several airlines. C) the economy's unemployment level. D) none of the above.
The sale of __________ goods is omitted from current GDP because __________
A) intermediate goods; these goods do not constitute production B) used goods; these goods were counted in an earlier year C) illegal; these goods do not constitute economic value D) b and c E) a, b, and c
Which of the following is the most frequently used tool the Fed uses to control the supply of money?
A. the discount rate B. the reserve requirements C. open market operations D. the 30-year home-mortgage interest rate
Which of the following is included in the calculation of investment when measuring GDP?
A. changes in business inventories B. new home construction C. the purchase of new capital goods D. all of these