The presence of a negative externality is likely to give rise to significant market failures when:
a. property rights are not well-defined
b. property rights are well-defined.
c. there are few victims of pollution and few polluters.
d. transaction costs are relatively low.
a
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If nominal money supply grows 3% and real money demand grows 8%, the inflation rate is
A) -5%. B) 8/3%. C) 5%. D) 11%.
If the required reserve ratio is .10, demand deposits are $200 million, and total reserves are $40 million, then excess reserves are
A) $20 million. B) $40 million. C) $400 million. D) $2,000 million.
An increase in the interest rate would induce people to
A) sell shares of stock and buy bonds, but would have no effect on their desire to hold money. B) get rid of all their money and buy stocks with it. C) sell their least liquid assets and hold more money in case interest rates go up again. D) hold a smaller fraction of their wealth in the form of money.
To be officially classified as unemployed, a person must be
A. at least 16, not working and actively seeking employment. B. collecting unemployment benefits. C. at least 21 and not working. D. laid off or fired.