Which of the following is NOT a reason the Fed changes the rate of growth of the money supply?
A. to influence aggregate demand
B. to influence the amount of investment
C. to shift the demand for money curve
D. to influence the amount of consumption
Answer: C
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Explain the concept of "crowding out" in a closed economy
What will be an ideal response?
Which of the following statements is false?
A. A subsidy can be used to internalize a negative externality; a tax can be used to internalize a positive externality. B. Ronald Coase stressed the reciprocal nature of externalities. C. One way to deal with negative externalities is for government to apply regulations directly to the activity that generates the externalities. D. Simply because taxes and subsidies are sometimes used to adjust for negative and positive externalities, respectively, it does not necessarily follow that the socially optimal level of output will be reached.
According to the text, Singapore is classified as a less developed country (LDC)
a. True b. False Indicate whether the statement is true or false
If the government owns a nationalized firm, the prices are
a. set by an administrative agency of the government b. set by the free market c. high enough to make economic profits for the government d. determined by competition e. set to encourage efficiency and reduce waste