Which of the following indicates the primary mechanism by which the money supply expands?
a. The U.S. Treasury prints additional currency.
b. The Fed purchases additional bonds, which increases the reserves available to the banking system.
c. The public decides to hold more currency rather than checking deposits.
d. The U.S. government purchases additional gold.
B
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If the government conducts a survey asking it citizens how much they value having potholes filled in, we can expect
a. an accurate evaluation of the work. b. citizens to understate the value of the work. c. citizens to exaggerate the value of the work. d. most citizens to refuse to answer.
Is the minimum wage fair?
A) Yes, because all workers benefit because they are paid more. B) No, because it enhances the prospects of voluntary exchange. C) No, because workers who lose their jobs are made worse off. D) Yes, because firms must pay a wage closer to a living wage. E) Yes, because workers need the extra income.
Sandy's current consumer surplus for candy is 20. Candy is an inferior good for her. When her income increases and the price of candy remains unchanged, her consumer surplus will
A) increase. B) decrease. C) remain the same. D) Not enough information.
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.