Which of the following would tend to increase the value of a future stream of income?
a. an increase in the rate of inflation
b. an increase in the interest rate
c. a reduction in the interest rate
d. a reduction in the size of the expected future income
C
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Which of the following provides an example of command-and-control regulation? a. Taxing producers based on the external costs created by their pollution, thus internalizing external costs
b. Requiring firms to reduce their pollution by 50 percent, thus allowing them to emit 50 percent of their historical emissions, and allowing them to freely buy and sell allowances. c. Requiring firms to use a particular type of pollution-control technology, such as smokestack scrubbers or catalytic converters. d. Subsidizing firms that exceed their pollution-control targets.
Suppose the mean earnings of two groups differ. Which of the following would be the logical conclusion?
a. The group with the lowest earnings must be the victim of employment discrimination. b. The group with the lowest earnings must be less productive. c. The group with the highest earnings is more highly motivated and materialistic. d. Without consideration of preferences and productivity factors, differences in unadjusted mean earnings do not necessarily reflect employment discrimination.
Which of the following statements about nominal GDP and real GDP is correct?
a. Nominal GDP is a better gauge of economic well-being than real GDP. b. Real GDP is a better gauge of economic well-being than nominal GDP. c. Real GDP and nominal GDP are equally good measures of economic well-being. d. Neither nominal nor real GDP provide a measure of economic well-being.
If there is an adverse supply shock and the Federal Reserve responds by increasing the growth rate of the money supply, then in the short run the Federal Reserve's action
a. lowers both inflation and unemployment. b. lowers inflation but raises unemployment. c. raises inflation but lowers unemployment. d. raises both inflation and unemployment.