The Coase theorem asserts that the private market will always solve the problem of externalities and allocate resources efficiently
a. even if private parties experience substantial costs of bargaining.
b. even if the initial distribution of legal rights is skewed in favor of some private parties over others.
c. only when there is a large number of private parties that engage in bargaining.
d. All of the above are correct.
b
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In the market for loanable funds in an open economy, the supply of loanable funds:
A. can come from domestic savers or savers abroad. B. is equal to national savings. C. is equal to private savings. D. is equal to public savings.
Bank holding companies are examined by the __________________
Fill in the blank(s) with the appropriate word(s).
According to Keynesians,
A. an increase in aggregate demand will lead to a higher average price level. B. an increase in aggregate demand will eventually lead to a higher average price level. C. an increase in aggregate demand will eventually lead to less real GDP. D. None of the choices are true of Keynesians.
Papayas and grapefruit are substitute goods. A drought in California destroyed a good portion of the grapefruit crop. Ceteris paribus,
A. the price of both papayas and grapefruit will fall. B. the price of both papayas and grapefruit will increase. C. the price of grapefruit will increase, and the price of papayas will fall. D. the price of grapefruit will fall, and the price of papayas will increase.