Conscious manipulation of the interest rate causes it to become a less effective tool in allocating resources among time periods.
Answer the following statement true (T) or false (F)
True
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
You receive money as payment for babysitting your neighbors' children. This best illustrates which function of money?
a. medium of exchange b. unit of account c. store of value d. liquidity
The following graph is the production possibilities curve of a nation:
Refer to the above graph. Which of the following combinations would be unattainable?
A. 8 drill presses and 1 bread
B. 7 drill presses and 2 bread
C. 10 drill presses and 4 bread
D. 2 drill presses and 3 bread
All of the following are choices for the polluter when faced with additional costs to abate the externality EXCEPT
A) ignore the government regulations. B) install pollution abatement equipment. C) reduce the pollution-causing activity. D) pay the price to pollute.