Which of the following transactions would be included in this year's GDP?
a. Noah purchases a five-year-old house from William.
b. Noah rents a five-year-old house from William.
c. Noah purchases 100 shares of AT&T stock from William.
d. Noah purchases an antique at William's garage sale.
B
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If all consumers are willing to buy insurance at the zero-profit pooling price, there cannot be a separating equilibrium.
Answer the following statement true (T) or false (F)
Olive oil producers want to sell more olive oil at a higher price. Which of the following events would have this effect?
A) an increase in the price of land used to plant olive trees B) an increase in the price of olive oil presses C) research finds that consumption of olive oil reduces the risk of heart disease D) a decrease in the cost of transporting olive oil to markets
The interest rate on Treasury Inflation Indexed Securities can be roughly interpreted as
A) the real interest rate. B) the nominal interest rate. C) the rate of inflation. D) the rate of deflation.
Refer to the competitive market diagram for product Z. Assume that the current market demand and supply curves for Z are D 1 and S 1 . If there are substantial external benefits associated with the production of Z, then:
A. government can improve the allocation of resources by subsidizing consumers of Z.
B. government can improve the allocation of resources by imposing a per-unit tax on Z.
C. a government subsidy for producers of Z would ensure that consumers are paying directly
for all of the benefits they receive from Z.
D. consumers are paying too much for the good.