If the economy is inflationary, the Fed would most likely:
A. encourage banks to provide loans by buying government securities.
B. encourage banks to provide loans by raising the discount rate.
C. encourage banks to provide loans by selling government securities.
D. restrict bank lending by selling government securities.
Answer: D
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External costs
A) are borne by the producers of a good or service. B) are borne by government. C) are borne by those who cannot afford to purchase the good. D) are borne by those who do not produce the good or service.
In the steady-state diagram of the Solow model, an increase in saving per worker is shown by
A) shifting the saving-per-worker curve down, resulting in a lower steady-state capital—labor ratio. B) shifting the saving-per-worker curve up, resulting in a higher steady-state-capital—labor ratio. C) shifting the saving-per-worker curve up, resulting in a lower steady-state capital—labor ratio. D) shifting the saving-per-worker curve down, resulting in a higher steady-state capital—labor ratio.
Market clearing prices in a market system act as
A) a signaling device. B) a direct measure of resource costs. C) a way for producers to advertise. D) a legally determined rationing device.
The solution of a game is dependent upon
a. predicted response of competitors b. the existence of a perfectly inelastic demand curve c. costs of production being constant d. economies of scale in production e. marginal revenue being equal to marginal cost