Suppose Stan owns a piece of property with a large lake. Initially, Stan and his family were the only people who swam in the lake. Then Stan started selling tickets to people who wanted to go swimming in the lake. When Stan died, he left the lake and the land it was on to the state, stipulating that the lake be left open to the public for swimming. Due to the lake's remote location, it was never crowded. After Stan died, the lake became a ________ good.
A. public
B. commons
C. private
D. collective
Answer: A
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The table above gives a nation's investment demand and saving supply schedules. It also has the government's net taxes and expenditures. The loanable funds market is in equilibrium when the real interest rate is
A) 7 percent B) 4 percent. C) 3 percent D) 6 percent. E) 5 percent.
When the nominal exchange rate falls
A) the domestic currency buys more units of foreign currency and the domestic currency has depreciated. B) the domestic currency buys fewer units of foreign currency and the domestic currency has depreciated. C) the domestic currency buys more units of foreign currency and the domestic currency has appreciated. D) the domestic currency buys fewer units of foreign currency and the domestic currency has appreciated.
If the Fed buys $10 million of government securities when the desired reserve ratio is 20 percent and the currency drain ratio is 5 percent, the quantity of money
A) increases by $42 million. B) increases by $50 million. C) decreases by $42 million. D) decreases by $50 million. E) increases by $7.5 million.
If the trade surplus has fallen, which of the following is a possible explanation?
a. The real exchange rate rose. b. Foreign income fell. c. Domestic income fell. d. The foreign price level rose.