Why is it that the private market fails to provide the efficient quantity of a public good?
a. because it is impossible to force those who benefit from the good to pay for it
b. because public goods are always large-scale projects that require government financing
c. because there are external costs associated with the provision of a public good
d. because there are uninsurable risks associated with a public good
Ans: a. because it is impossible to force those who benefit from the good to pay for it
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Suppose manufacturers introduce a new model car to replace a car currently included in the CPI basket. The price of the new car is 10 percent higher than the discontinued model, but the new car has additional safety features and amenities. In this situation the CPI will tend to ________ inflation as a result of ________ bias.
A. accurately measure; substitution B. overstate; quality adjustment C. overstate; substitution D. understate; quality adjustment
Suppose the annual growth rate of real GDP for the nation of Vicuna is 8%, the growth rate of velocity is 0%, and the growth rate of the money supply is 12%
a. What is the current rate of inflation? b. What will happen to the inflation rate if the growth of the money supply increases to 16%? c. What will happen to the inflation rate if the growth of the money supply increases to 16%, and at the same time, the growth rate of velocity increases to 4%?
A "universal bank"
a. has branches in many countries. b. the same as a U.S. commercial bank. c. performs both traditional banking and merchant-banking functions. d. none of the above. e. all of the above
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow.
Figure 6.2Refer to Figure 6.2. Assume Mr. Lingle?s budget is AC. At which point does Mr. Lingle spend exactly his income?
A. A. B. B. C. C. D. All of the above are correct.