The willingness to pay for a commodity:
A) decreases as consumption of the commodity increases.
B) increases as consumption of the commodity increases.
C) is always less than the market price of the commodity.
D) is always greater than the market price of the commodity.
A
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Assuming all excess reserves are loaned out, if the reserve ratio is 25 percent, the money multiplier will be equal to
A) 0.5. B) 2.5. C) 4. D) 5.
The relationship between the overall price level in the economy and total production by firms is shown in the:
A. inflation rate. B. aggregate supply curve. C. business cycle. D. aggregate demand curve.
A paint firm has just announced that it will be building a new plant in a small town that is currently experiencing a high level of unemployment. The new plant will create 500 new jobs in the area and will occupy unused land at the edge of town. The
plant will also dump some harmful chemicals into the town's river. From an economic standpoint this dumping of chemicals A) is unimportant since the firm is reducing the unemployment in the region. B) creates a negative externality. C) is the production of a public good. D) creates a positive externality.
Which of the following might you believe if you say that "it's their fault" that the United States runs a trade deficit?
A. American consumers borrow too much to buy imported goods like cars and electronics. B. U.S. manufacturers are incompetent and unable to compete with foreign producers. C. Other countries have used nontariff barriers to keep out U.S. exports. D. The United States is a successful rich economy that can afford a lot of imports.