Your favorite holiday is Halloween and each year you decorate your yard with pumpkins, skeletons, and tombstones, and you install a noise machine which blasts haunting sounds 24 hours a day. It is such a spectacle that hundreds of people drive by your house each day to gawk at the display. The noise and traffic disturb your neighbors who sue you, and you are required to take down your display permanently. This is an example of
A. the free-rider problem.
B. an injunction.
C. a liability rule.
D. the Coase theorem.
Answer: B
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If an economy grows at 6 percent per year, how many years would it take for real GDP to double?
What will be an ideal response?
The discount rate refers to
A. the rate at which banks write off bad loans. B. the rate at which assets lose their real value as a result of inflation. C. the rate at which money loses its value as a result of inflation. D. the rate of interest that the Fed charges on loans to commercial banks and thrift institutions.
According to the quantity theory of money, if the economy were facing inflation, the Federal Reserve Bank could combat it by:
A. increasing the supply of money. B. increasing taxes. C. cutting taxes. D. decreasing the supply of money.
Which of the following correctly describes the Lorenz curve??
A. ?The Lorenz curve shows that the increasing income inequality in the U.S. society is actually good for the economy. B. The Lorenz curve shows the growth rate in real median family income over time. C. ?The Lorenz curve shows the cumulative distribution of family income, ranked from the poorest to the richest families, and compares that curve with the straight line indicating perfectly equal income distribution. D. ?The Lorenz curve shows the cumulative distribution of family income, ranked from the richest to the poorest families, and compares that curve with the ideal of having all income go to the richest 5 percent of society.