In a market system, well-defined property rights are important because they:
A. encourage economic activity.
B. limit destructive economic growth.
C. create economic problems.
D. reduce unnecessary investment.
Answer: A
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If the size of the capital stock in an economy is stationary, ________.
A. gross investment is zero B. GDP is zero C. net investment is zero D. capital consumption (or depreciation) is zero
If there is currently a surplus of dollars, which of the following would you expect to see in the foreign exchange market?
A) There will be a decrease in the supply of dollars. B) The dollar will depreciate. C) The dollar will appreciate. D) There will be a decrease in the demand for dollars.
The basic Keynesian argument for discretionary monetary policy is that
A) monetary policy is the principal cause of business cycles. B) monetary policy is much more effective than fiscal policy. C) aggregate demand is unstable and monetary policy can help to stabilize it. D) reducing unemployment is much more important than reducing inflation.
Which of the following is included in the calculation of national income?
A) compensation of employees B) rental income C) indirect business taxes D) all of the above E) none of the above