The use of money and credit controls to change macroeconomic activity is known as:
A. Fiscal policy.
B. Monetary policy.
C. Supply-side policy.
D. Eclectic policy.
B. Monetary policy.
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Use the following graphs for a perfectly competitive market in the short run to answer the next question.
What will happen in the long run to market supply and the equilibrium price of the product?
A. Market supply will increase and equilibrium price will increase. B. Market supply will decrease and equilibrium price will decrease. C. Market supply will decrease and equilibrium price will increase. D. Market supply will increase and equilibrium price will decrease.
The greater your discount weight, the more your current decisions are driven by the future consequences of your actions. Do you agree? Explain
What will be an ideal response?
The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could
a. allow individual shepherds to choose their own flock sizes. b. internalize the externality by subsidizing the production of sheep's wool. c. auction off a limited number of sheep-grazing permits. d. wait until the market corrects the problem.
Suppose that the economy has a structural deficit of $200 billion and is operating above potential output. From this we can infer that the budget as a whole:
A. is balanced. B. is in surplus. C. is in deficit. D. could be in deficit, in surplus, or balanced.