If asset A is significantly more liquid than asset B, then it is _____ costly to convert asset A into cash than it is to convert asset B into cash. Furthermore, it is likely that asset B will be included in the _____ measure of money.
A. more; M1
B. less; M1
C. less; M2
D. more; M2
Ans: C. less; M2
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According to the Application, one reason for the increase in Chinese demand for pecans was
A) the expectation of higher future prices. B) a decrease in income. C) an increase in the price of walnuts, a substitute good. D) an increase in consumer preferences.
When logging in the Pacific Northwest destroys forests that hikers would have used for eco-tourism, the destruction of the trails is an example of
A) an external cost. B) a private cost. C) a government cost. D) an external benefit. E) None of the above answers is correct.
When comparing the standard of living in two countries it is important to adjust total output for differences in:
A. political systems. B. geographic area. C. population. D. employment levels.
Constitutional economists
A) assert that within a given set of institutions, constraints, laws and rules, outcomes might be the same no matter who is elected to office. B) study the type of constraints that individuals might seek to place upon themselves in order to achieve some objective that doesn't seem achievable in a non-constrainable environment. C) assert that better outcomes arise from changing the political party in power at any given point in time than from changing institutions and constraints. D) b and c E) a and b