Which of the following is the best definition of money?
a. anything generally accepted as a payment for goods or repayment of debt
b. anything that is a liability of the federal government
c. anything that is a liability of a commercial bank
d. coins and currency in the hands of the public
a
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Which type of graph is most useful in determining if two variables are correlated?
A) variable-correlation figure B) time-series C) scatter diagram D) cross-section E) None of the above answers is correct.
The point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle of
A) total benefits. B) increasing marginal cost. C) decreasing marginal benefit. D) increasing opportunity cost. E) decreasing marginal price.
Like negative externalities, tradable permits are useful in allocating common resources because:
A. the depletion of common resources imposes a negative externality. B. the problem present in both is overconsumption. C. the socially optimal quantity is not the same as the individual consumers in either case. D. All of these statements are true.