________ demonstrates that an optimal (or most efficient) level of output exists for every public good.
A. The Tiebout hypothesis
B. Samuelson's theory of public expenditure
C. The Coase theorem
D. The Theory of Public Choice
Answer: B
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Market equilibrium occurs when
A. the quantity demanded equals the quantity supplied. B. the market is changing rapidly. C. other things remain the same. D. buyers get the lowest possible price. E. everyone who wants the good gets the quantity he or she wants.
Draw the demand for and supply of the U.S. dollar in each of the following cases. Diagram and explain in words the effect of each of the following events in the short run. Make sure to properly label the axes
In each case, assume the two countries under consideration are important trading partners. (a) There is an increase in the real interest rates in the United States relative to Japan. (b) Investment returns in the United States decrease relative to expected returns in Japan. (c) Inflation in Japan fell relative to the inflation rate in the United States. (d) The Japanese expect the value of the U.S. dollar to decline. (e) The Federal Reserve raised interest rates fearing the inflationary pressures of a booming U.S. economy.
If a country must decrease current consumption to increase the amount of capital goods it produces today, then it must
A) be using resources inefficiently today, but will be more efficient in the future.
B) be producing along the production possibilities frontier today and its production possibilities frontier will shift outward if it produces more capital goods.
C) must be producing outside the production possibilities frontier and will continue to do so in the future.
D) must not have private ownership of property and will have to follow planning authorities' decisions today and in the future.
A 10-year Treasury note as a face value of $1,000, price of $1,200, and a 7.5% coupon rate. Based on this information, we know the:
A. coupon payment on this bond is equal to $90. B. current yield is equal to 8.33%. C. present value is greater than its price. D. coupon payment on this bond is equal to $75.