A good that provides external benefits to society has:
A. too few resources devoted to its production.
B. too many resources devoted to its production.
C. the optimal resources devoted to its production.
D. not provided profits to producers of the good.
Answer: A
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Joe's Taco Hut can purchase a delivery truck for $20,000 and Joe estimates it will generate a net income (after taxes, maintenance and operating costs) of $4,000 per year. His other option is to go to work for someone else earning net income of $3,000 per year. He should:
A. purchase the truck if the real interest rate is less than 5%. B. not purchase the truck if the real interest rate is greater than 1%. C. purchase the truck if the real interest rate is less than 15%. D. purchase the truck if the real interest rate is greater than 5%.
Suppose total disposable income in Country X rises by $500 billion while total consumption rises by $50 billion. What would be the slope of the consumption function for this nation?
a. 1 b. 0.1 c. 0.5 d. 0.25 e. 0.4
Bankers' business decisions effect the money supply because bankers
a. are respected men and women. b. have the ability to create money. c. use a special accounting system developed by the Federal Reserve Board. d. All of the above are correct.