When M1 is expanded to M2, the money supply:
A. almost doubles.
B. more than triples.
C. goes up tenfold in size.
D. changes very little.
Answer: B
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A temporary resource price differential refers to a price difference
a. that will not lead to a shift of resources among users b. caused by lack of resource mobility c. caused by economic rent d. that, for example, causes more workers to move to higher-paid areas e. caused by minimum wage legislation
Which of the following is a main political objection against using the market to reduce pollution?
A. Pollution charges and cap-and-trade schemes raise prices and lower consumer welfare. B. Cap-and-trade redistributes income from less-efficient polluters to more-efficient polluters. C. Firms already pay a high corporate tax. D. Consumers do not have the same built in tax loopholes as firms.
If the Fed wanted to stimulate the economy to limit the effects of a recessionary gap, then it should ________ the federal funds rate in order to ________ the real interest rate and thereby ________ investment.
Fill in the blank(s) with the appropriate word(s).
The two main characteristics of a public good are:
A. production at constant marginal cost and rising demand. B. nonexcludability and production at rising marginal cost. C. nonrivalry and nonexcludability. D. nonrivalry and large negative externalities.