An example of a public good is
A. the car I own.
B. housing subsidies.
C. software produced by Microsoft.
D. the fire department.
Answer: D
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A country can control
A) its flexible exchange rate. B) monetary policy oriented toward domestic goals. C) international capital movements. D) foreign inflationary policies. E) and avoid risks in international trade.
One way the venture capital firm avoids the free-rider problem is by
A) prohibiting the sale of equity in the firm to anyone except the venture capital firm. B) prohibiting members from serving on the board of directors. C) prohibiting the borrowing firm from replacing management. D) requiring collateral equal to the value of the borrowed funds.
When bond prices fall, interest rates rise.
Answer the following statement true (T) or false (F)
When the Fed raises the discount rate, it
a. lowers the cost of borrowing from the Fed, allowing banks to make more loans b. raises the cost of borrowing from the Fed, disallowing banks from making the same quantity of loans c. increases the amount of excess reserves that banks hold, allowing them to make more loans d. increases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans e. decreases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans