An increase in the target for the federal funds rate would be an example of
A. contractionary monetary policy.
B. contractionary fiscal policy.
C. expansionary monetary policy.
D. expansionary fiscal policy.
Answer: A
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If fair insurance is offered to a risk-averse person, she will
A) buy enough insurance to eliminate all risk. B) not buy any insurance because it is overpriced. C) not buy any insurance since the marginal utility of the amount of the payment is positive. D) buy enough insurance to cover about half of the possible loss.
According to the World Bank, developing countries greatly outnumber industrial countries
a. True b. False Indicate whether the statement is true or false
Why does the government allow some markets to be monopolized by granting patents?
a. to promote a more equal distribution of income b. to correct for negative externalities c. to promote technological progress d. to ensure lower prices for consumers in the short run
Suppose the wage earned by pear pickers suddenly rises. Which of the following effects would we most likely observe as a result?
a. The supply of apple pickers would decrease and the equilibrium wage of apple pickers would decrease. b. The supply of apple pickers would decrease and the equilibrium wage of apple pickers would increase. c. The demand for apple pickers would increase and the equilibrium wage of apple pickers would decrease. d. The demand for apple pickers would decrease and the equilibrium wage of apple pickers would decrease.