Private markets tend to undersupply nonexcludable goods because of
a. individuals' incentives to be untruthful.
b. overcrowding.
c. free riding.
d. dissipated rents.
c. free riding.
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When a good is imported, the domestic production of it ________ and the domestic consumption of it ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases E) increases; does not change
If the U.S. Surgeon General announced that increased grapefruit juice consumption could help prevent heart attacks, what would happen to the equilibrium price and quantity of grapefruit juice?
A) Price and quantity both increase. B) Price and quantity both decrease. C) Price increases but quantity decreases. D) Price decreases but quantity increases.
An expenditure-changing policy
A) alters the direction of the economy's total demand for goods and services. B) alters the level of the economy's total demand for goods and services. C) has no effect on aggregate demand. D) is the same thing as an expenditure-switching policy. E) affects aggregate supply but not aggregate demand.
What is the change in the money supply when the Fed purchases $700 worth of bonds and the required reserve ratio is 14 percent assuming banks hold no excess reserves?