The flow of ________ increases the stock of ________.
A. money; income
B. saving; wealth
C. investment; profits
D. consumption; income
Answer: B
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Arguments that economic growth must be constrained by environmental problems and limits of natural resources ignore the fact that economic growth can:
A. occur with only benefits and no economic costs. B. take the form of improved quality as well as increased quantity. C. increase both average labor productivity and the share of population employed. D. be measured in both nominal and real terms.
Which of these is an example of a negative network externality?
A) Bandwagon effect B) Pollution C) Snob effect D) Two-part tariff
Continuing with the same vacation-insurance company from the preceding question, is there any vacation-day price that would both strictly increase the family's expected utility (compared to no insurance) and strictly increase the profits of the risk-neutral insurance company?
a. Yes, two days. b. Yes, three days. c. Yes, four days. d. No.
The statement that "IBM's stock closed at $85" is
a. a normative statement b. a positive statement c. a macroeconomic observation d. financial manipulation e. a sign that the market may be undervalued