From the standpoint of the economy as a whole, the role of
a. the interest rate is to make sure that the price of bonds increases over time.
b. diversification is to eliminate market risk.
c. insurance is to reduce the risks inherent in life.
d. insurance is to spread risks around more efficiently.
d
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When a good ends up undersupplied, we can assume it is a:
A. common resource. B. private good. C. public good. D. transitory good.
The bowed-out-from-the-origin shape of the production possibilities curve occurs because resources are
a. equally well-suited to production of both goods b. not being used efficiently c. not always of equal quality and some are better suited to the production of one type of good than others d. increasing as more of one good is produced e. of an increasingly inferior quality
A subsidy for pollution not produced can induce producers to pollute at the efficient level.
A. True B. False C. Uncertain
Suppose Will gives his wallet containing $100 to Alex to hold while he works out. During Will's workout, Alex uses the $100 to pay his mechanic who fixed his scooter. The mechanic then took this $100 to his vet to pay off his account for rescuing his pet bird. The vet then used the $100 to pay Alex for money she owed him for tutoring her in economics. After Will's workout, Alex returns the wallet with the same $100 bill inside. Although the same $100 bill was used without Will's knowledge, everybody's debt has been settled. How much money was created?
a) $0 b) $100 c) $200 d) $300