The Fed's forward guidance in late 2012 through mid-2015 was framed in terms of keeping interest rates low
A. for an extended period.
B. at least until a particular date in the future.
C. based on outcomes for the unemployment rate and inflation rate.
D. until the next Presidential election.
Answer: C
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Every necessity is a normal good, but not all normal goods are necessities.
Answer the following statement true (T) or false (F)
Most economists believe price ceilings ______________
A. do more harm than good. B. have no impact on the market. C. do more good than harm. D. are necessary to protect consumers.
In which of the following situations would a negative externality most likely be involved?
A. It is night and Kenneth is sitting in his easy chair reading a novel by John Grisham. The lamp he is reading by has only a 40-watt light bulb. He is having a hard time reading. B. Alyson lives near an airport. At five o'clock in the morning every day she can hear the airplanes taking off and it awakens her. C. Lucy went to a fancy restaurant last night and ordered the most expensive meal on the menu. She hated it. D. Richard is taking an economics class from Professor Franklin. Professor Franklin often says things that confuse Richard.
A consumer is willing to pay $5 for a ball. If the market price of the ball increases from $2 to $3, consumer surplus will _____
a. decrease by $1 b. increase by $2 c. reduce by $5 d. increase by $3