In the case of positive externalities, too many people consume and produce the good compared to what is desired by society
a. True
b. False
Indicate whether the statement is true or false
False
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State how each of the following affect the aggregate demand curve
a. The price level increases. b. Consumers expect higher inflation in the future. c. The exchange rate rises. d. Foreign income decreases.
A classical IS—LM model of the world economy can be used to show that in a flexible exchange-rate system, a temporary increase in government purchases will cause
A) output and the real interest rate to rise, which reduces net exports but has an ambiguous effect on the real exchange rate. B) output and the real interest rate to rise, which increases net exports but has an ambiguous effect on the real exchange rate. C) output to rise and the real interest rate to fall, which reduces net exports and causes the exchange rate to depreciate. D) the real interest rate to fall, which causes the exchange rate to rise, which reduces net exports.
Which of the following would most likely cause both a decrease in the price of plasma screen TVs and a decrease in the number sold?
a. an increase in the supply of plasma screen TVs b. an increase in the demand for plasma screen TVs c. a decrease in the supply of plasma screen TVs d. a decrease in the demand for plasma screen TVs
When a corporation issues a bond, it is borrowing funds.
Answer the following statement true (T) or false (F)