The Coase theorem suggests that private markets may not be able to solve the problem of externalities
a. if the government does not become involved in the process.
b. when the number of interested parties is large and bargaining costs are high.
c. if the firm in the market is a monopoly.
d. if some people benefit from the externality.
b
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The principle of comparative advantage states that
a. whoever has a comparative advantage in producing a good or service also has the absolute advantage b. whoever has an absolute advantage in producing a good or service also has the comparative advantage c. whoever can produce a good or service using fewer resources than another individual has the comparative advantage d. total production of every good or service can be greater if individuals specialize according to their comparative advantage e. comparative advantage is maximized if each individual specializes according to his or her absolute advantage
Which of the following is correct?
a. Federal Reserve purchases of securities will increase the reserves available to commercial banks. b. Federal Reserve purchases of securities exert upward pressure on interest rates in the short run. c. The Federal Reserve System determines the ratio of currency held by the public to the money supply (M1). d. Federal Reserve purchases of securities will decrease the reserves available to commercial banks.
The recent WASDE report shows a decrease in expected imports of wheat. The US "total supply" of wheat for the crop year is estimated to:
a. Increase b. Decrease c. Remain unchanged d. Can't tell from available information
Discuss what factors could cause a real depreciation
What will be an ideal response?