In periods of high inflation, _____
a. people want to hold as much money as possible
b. the purchasing power of money decreases
c. the real interest rate exceeds the nominal interest rate
d. the nominal interest rates are likely to be low
e. the nominal interest rate equals the real interest rate
b
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Government debt is different from individual debt because
A) the government can always tax to reduce it. B) the government cannot declare bankruptcy. C) the government does not need to pay interest. D) the government can decide the interest rate.
Advocates of antipoverty programs claim that
a. the government has good information about what people are willing to pay to eliminate poverty. b. fighting poverty is a public good. c. private sector will incur higher costs than the public sector for these programs. d. All of the above are correct.
A technically efficient method of production produces a given level of output at the lowest possible cost.
Answer the following statement true (T) or false (F)
Price ceilings set below the equilibrium create:
A. externalities. B. unemployment. C. shortages. D. surpluses.