The Federal Reserve stepped in to help
a. Bear Stearns but not Lehman Brothers.
b. Lehman Brothers but not Bear Stearns.
c. both Bear Stearns and Lehman Brothers.
d. neither Bear Stearns nor Lehman Brothers.
a
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The marginal cost of enforcement (MCE)
a. is the additional cost incurred by government to monitor and enforce abatement activity b. is a negatively sloped function c. can be measured as the vertical sum of MACmkt and MSC at any abatement level d. represents the horizontal sum of all polluters’ MAC functions
Classical economists and Keynesian economists respect each other but hold very different views about how to read the quantity theory of money. According to the classical view,
a. velocity is constant (Keynesians agree), which means changes in price will cause changes in price or quantity (Keynesians disagree) b. quantity is constant (Keynesians agree), which means changes in the money supply could cause either changes in velocity or changes in prices (Keynesians disagree) c. velocity and price are constant (Keynesians disagree) so that changes in the money supply cause changes in quantity (Keynesians disagree) d. velocity and quantity are constant (Keynesians disagree) so that changes in the money supply only cause changes in prices (Keynesian disagree) e. velocity is constant while quantity is variable (Keynesians disagree) so that changes in the money supply change both price and quantity (Keynesians disagree)
Figure 5-7
In Figure 5-7, budget line B compared to A clearly shows that the
a.
price of wine increased.
b.
price of beer decreased.
c.
price of beer increased.
d.
consumers' money income increased.
The economic perspective focuses largely on marginal analysis, which means analyzing:
A. Peripheral elements of a given issue or action B. The minor aspects of a given issue or decision C. The changes in the situation that would result from a given action D. Emotional and psychological facets of a given action