Economic rent is:
A. the amount people pay for an apartment in a perfectly competitive market.
B. sometimes higher and sometimes lower than the owner's reservation price.
C. the difference between the payment made to the owner of a factor of production and the owner's reservation price.
D. the payment made to the owner of a factor of production, which is usually equal to the owner's reservation price.
Answer: C
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In 1963, government economists assumed that the MPC for the United States was approximately 0.90. If taxes were cut by $9 billion, then consumer expenditures would initially be expected to
A. decrease by $9.0 billion. B. increase by $9.0 billion. C. decrease by $8.1 billion. D. increase by $8.1 billion.
When IBM, an American firm, produces computer chips in another country, this production is not included in U.S. GDP because the production did not take place in the United States
Indicate whether the statement is true or false
A key difference between clubs and government is _____
a. government requires everyone within its jurisdiction to participate b. government acts on behalf of the poor c. government is not frivolous, like most clubs d. government requires collective action
Other things constant, which of the following would cause the M1 money supply to decline?
a. an increase in the quantity of U.S. currency held overseas b. a shift of funds from interest-earning checking deposits to money market mutual funds c. a reduction in the general public's holdings of currency outside of banks because debit cards have become more popular and widely accepted d. a shift of funds from money market mutual funds into stock and bond mutual funds because the fees to invest in the latter have declined