A positive externality clearly occurs when
A) a person behaves in the public interest.
B) a person's action unintentionally benefits other people.
C) a person behaves only with courtesy and social grace.
D) a person couldn't care less about anybody else.
B
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There is ________ for any bond whose time to maturity matches the holding period
A) no interest-rate risk B) a large interest-rate risk C) rate-of-return risk D) yield-to-maturity risk
The Fed initiates a contractionary monetary policy that is correctly anticipated by economic agents in the economy. The result is
A) decreased prices, but no change in real GDP. B) decreased prices and decreased real GDP in the short run, but only decreased prices in the long run. C) decreased real GDP in the short run and decreased prices in the long run. D) decreased real GDP and prices in both the short run and the long run.
Jennifer has just finished high school and is deciding whether to start working or go to college. She has already been offered a job that pays $35,000 a year. Four years of college will cost $12,000 each year. She would earn an extra $20,000 each year after she graduates for the 45 years she plans on working until she retires. Jennifer should invest in college when the net present value of that investment is ______ and the internal rate of return is ______ the current interest rate.
A. positive; greater than B. negative; greater than C. positive; less than D. negative; less than
Money demand depends on
a. the price level and the interest rate. b. the price level but not the interest rate. c. the interest rate but not the price level. d. neither the price level nor the interest rate.