Knowledge capital is nonrival in the sense that
A) firms do not compete to be the first to develop new technologies.
B) two people can use the same knowledge to develop and produce a product.
C) no single company can be excluded from the benefits of new technologies.
D) firms can benefit from the research and development of rival firms without paying for that benefit.
B
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Due to the existence of the FDIC, banks
A) have not changed their behavior even with the existence of insurance. B) are no longer concerned about net worth. C) become more cautious in making loans. D) may make riskier loans knowing that their depositors are insured.
If the government set a price at $16, there would be price __________, that would cause a ___________ of ______ units.
A. floor; shortage; 10
B. floor; surplus; 10
C. ceiling; shortage; 10
D. ceiling; surplus; 10
If a central bank were required to target inflation at zero, then when there was a positive aggregate supply shock the central bank
a. would have to increase the interest rate. This would move unemployment closer to the natural rate. b. would have to increase the interest rate. This would move unemployment further from the natural rate. c. would have to decrease the interest rate. This would move unemployment closer to the natural rate. d. would have to decrease the interest rate. This would move unemployment further from the natural rate.