Which of the following describes a negative externality?
a. A third party is negatively affected by a private transaction it was not part of.
b. A third party is positively affected by a private transaction it was not part of.
c. A party is negatively affected by a private transaction in which it took part.
d. A party is positively affected by a private transaction in which it took part.
a. A third party is negatively affected by a private transaction it was not part of.
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A characteristic of an oligopoly is:
a. mutual interdependence in pricing decisions. b. independent pricing decisions. c. lack of control over prices. d. none of these.
An example of a lump-sum tax is a(n):
A. income tax. B. property tax. C. sales tax. D. head tax.
Do markets solve all of society's problems?
a. Yes, markets are efficient and work well under nearly all circumstances. b. Yes, markets solve the problems of production and distribution. c. No, they do not solve problems such as unemployment and inflation. d. No, they hardly solve any problems at all. e. Uncertain, economic theory has no answer to this question.
When the Federal Reserve wants to increase the money supply it _____ on the open market; when it wants to reduce the money supply is ______ on the open market.
Fill in the blank(s) with the appropriate word(s).