Steve raises bees to pollinate his orange trees. One of the bees just stung him. This is a(n)
A) private cost.
B) social cost.
C) opportunity cost.
D) common property.
Answer: A
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A bank can safely lend an amount equal to its
A) excess reserves. B) required reserves. C) vault cash. D) total reserves.
Other things equal, an increase in corporate income taxes will ________ the after-tax profitability of investment projects, which leads to ________ in output and employment
A) increase; an increase B) increase; a decrease C) decrease; an increase D) decrease; a decrease
Describe the Keynesian transmission mechanism for a decrease in the money supply. Assuming that no liquidity trap exists, that investment is interest-sensitive, and that the economy is in the horizontal portion of the AS curve, what happens to Real GDP and the price level? How can you tell if this is a direct transmission mechanism or an indirect one?
If the United States imposed higher tariffs and more restrictive quotas that reduced imports,
A) employment in the U.S. would be higher. B) the U.S. would not gain at the cause expense to other countries. C) the U.S. would gain at the expense of other countries. D) the wage rates of U.S. workers would be higher.