Market failures occur whenever
A) private returns may be greater than social returns.
B) social returns may be greater than private returns.
C) the free market produces less than what is socially optimal.
D) monopolies exist in a market.
E) All of the above.
E
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An increase in the discount rate will
A) have an unclear effect on the money supply. B) not affect the money supply. C) decrease the money supply. D) increase the money supply.
The above table gives data for the nation of Mouseville. There are no imports into or exports from Mouseville. Unplanned inventory changes equal $50 billion when real GDP equals
A) $800 billion. B) $900 billion. C) $500 billion. D) $300 billion. E) $700 billion.
For a perfectly competitive firm
A) price is greater than marginal revenue. B) price equals marginal revenue. C) price is less than marginal revenue. D) there is no relationship between price and marginal revenue.
According to Friedman's permanent income hypothesis, a family's income can be divided into permanent income and
a. temporary income b. transitory income c. residual income d. extra income e. transitional income