A knowledge spillover is:
a. a negative externality.
b. a positive externality.
c. a constant externality.
d. an externality.
Ans: b. a positive externality.
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A change in expectations about future prices by consumers, who now believe that prices will be higher than they earlier thought, will eventually result in a(n)
a. increase in the interest rate b. decrease in the interest rate c. change in the interest rate but the direction of the change depends upon how much expectations changed d. change in the market rate of interest but the equilibrium rate of interest remains unchanged e. change in the equilibrium rate of interest but the market rate of interest remains unchanged
The imposition of a binding price floor on a market
a. causes quantity demanded to be greater than quantity supplied. b. causes quantity demanded to be less than quantity supplied. c. causes quantity demanded to be equal to quantity supplied. d. causes a decrease in demand.
Conservatives usually favor increasing government spending to increase aggregate demand.
Answer the following statement true (T) or false (F)
The asset demand for money is
A. greater at low interest rates, because the opportunity cost of holding money is low. B. greater at low interest rates, because the opportunity cost of holding money is high. C. greater at high interest rates as investors can earn more on their investments. D. lower at low interest rates, because the opportunity cost of holding money is high.