In the market for land, if the supply of land is perfectly inelastic, an increase in the demand for land will result in a(n)
A) increase in the real interest rate.
B) increase in economic rent.
C) decrease in the equilibrium price.
D) increase in the quantity supplied of land.
Answer: B
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To maximize social welfare in the presence of a negative externality, marginal __________ must equal marginal __________
a. social cost; private cost b. private cost; social cost c. social cost; social benefit d. private cost; social benefit e. social cost; external cost
As the economy goes through an expansion,
a. fluctuations in GDP become more severe b. unemployment finally stabilizes c. investment stabilizes d. the classical model becomes a better predictor e. unemployment falls.
From 1991 to 2007, the rate of inflation in the United States has been
A. zero. B. between zero and 2.1 percent. C. between 1.6 percent and 4.1 percent. D. between 3.2 percent and 7.2 percent.
All of the following are functions of the Fed EXCEPT
A. providing paper currency. B. enforcing international trade agreements. C. the banker and fiscal agent for the government. D. serving as a mechanism for clearing checks.