A decrease in the target for the federal funds rate would be an example of
A. expansionary fiscal policy.
B. contractionary fiscal policy.
C. expansionary monetary policy.
D. contractionary monetary policy.
Answer: C
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The fact that employees often take longer lunch breaks than they are supposed to is an example of
a. the principal-agent problem. b. moral hazard. c. adverse selection. d. a golden parachute.
The "cost of rainforest preservation" can be lowered for developing countries by
(a) the development of alternative rainforest products. (b) research on agriculture in rainforest soils. (c) encouraging rainforest settlement of the poor. (d) subsidies for activities like cattle raising.
Freedom of economic choice is one of the chief advantages of a
a. market economy b. command economy c. communist economy d. traditional economy
According to the quantity theory of money, if an economy produces 5,000 units of output, its money supply equals $40,000 and the velocity of money equals one, then the price level will equal:
A. $0.13. B. $1.25. C. $8. D. $200.