Government failure means that government action reduces market efficiency
Indicate whether the statement is true or false
True
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At full employment, the expected inflation rate is
A) higher than the inflation rate. B) unrelated to the inflation rate. C) equal to the inflation rate. D) lower than the inflation rate. E) unknown.
Suppose the marginal utility of a dollar for Carl is 7 utils and for Judy, 12 utils. According to Lerner, society will maximize its total utility if
a. we transfer money from Carl and give it to Judy as long as the marginal utility of money for Carl is lower than that of Judy's b. we transfer money from Carl and give it to Judy as long as the marginal utility of money for Carl is higher than Judy's c. we transfer money from Judy and give it to Carl as long as the marginal utility of money for Judy is lower than Judy's d. we allow the market to determine the marginal utilities of Carl and Judy regardless of whose is higher e. Carl and Judy have the same utility functions
When the price of corn was "low," consumers in the United States spent a total of $8 billion annually on its consumption. When the price halved, consumer expenditures actually DECREASED to $6 billion annually. This indicates that:
A. the demand for corn is elastic. B. the demand for corn is inelastic. C. corn is a Giffen good. D. the demand curve for corn is upward sloping.
What effect has the presence of federal deposit insurance had on the banking industry?
A. Banks have made riskier loans. B. Depositors have become more vigilant in monitoring the decisions made by managers of their banks. C. Banks now hold more excess reserves. D. Banks have made it more difficult for customers to qualify for loans.