Economists are most likely to suggest that societies address the inefficiencies created by negative externalities by:
A. voluntary conservation.
B. direct regulation.
C. making the price people pay reflect the cost of the externality.
D. leaving environmental problems alone so that the market can deal effectively with them.
Answer: C
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If real GDP grows by 3 percent, the velocity of circulation does not change, and the quantity of money grows by 5 percent, then in the long run the inflation rate is
A) 8 percent. B) -5 percent. C) 2 percent. D) 3 percent. E) -2 percent.
A person is dynamically inconsistent if:
A. lapses in self-control occur. B. he does not always follow through on his plans and intentions. C. he changes his ranking of alternatives available at some future date as the date approaches or once it arrives. D. All of these are sufficient for dynamic inconsistency.
Regulation imposed by such organizations as the Food and Drug Administration or the Environmental Protection Agency seeking to protect the welfare of people in our nation is referred to as
A) moral regulation. B) natural regulation. C) rate-of-return regulation. D) social regulation.
In the Keynesian model, with efficiency wages,
A. the full-employment level is determined at the intersection of the labor demand curve and the efficiency wage line. B. an increase in labor supply increases employment. C. a decrease in labor supply shifts the FE line to the left. D. the full-employment line is determined where the quantity of labor demanded equals the quantity of labor supplied.