Special districts are often set up among small governments to deal with _____
a. externalities internalized within a governments borders
b. externalities that spill across borders
c. free-riding problems concerning public goods
d. unhealthy competition among local governments
b
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A firm's stock price will be higher when the interest rate is ____ and the value of the firm's expected future profits are ____
a. lower; larger b. lower; smaller c. higher; larger d. higher; smaller
When the price level falls
a. people want to hold less money. b. the interest rate falls. c. investment spending rises. d. All of the above are correct.
Refer to Figure 8.4. If three microwave ovens are produced, average variable costs are A) $166.67. B) $333.33. C) $500. D) $1,500.
If workers always see inflation coming, and if they demand wage increases in advance so that inflation does not erode real wages, then the economy’s aggregate supply curve on the AD–AS diagram will
A. be a vertical line corresponding to potential GDP. B. be a horizontal line corresponding to potential GDP. C. slope downward. D. slope upward.