If the free market is called upon to provide public goods, then:
A. there will more public goods provided than is optimal.
B. there will be fewer public goods provided than is optimal.
C. the market will provide the optimal number of public goods.
D. the market price will be correct, and the optimal amount of output of public goods will be produced.
Answer: B
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If producers must receive a higher price to be induced to produce any quantity, we can conclude that
A) supply decreased. B) demand decreased. C) both supply and demand increased. D) demand increased.
An increase in the price of butter is likely to cause the demand for:
A. olive oil to increase. B. olive oilto decrease. C. butter to increase. D. butter to d.
Which is likely to be larger, the velocity of M1 or M2?
A. M1, because M2 is a larger number. B. M2, because M1 is a larger number. C. The velocities of both are approximately equal. D. The numbers of velocity switch in relative size.
A bank's reserves include:
A. U.S. Treasury bills and currency in the bank. B. the bank's deposits at the Federal Reserve. C. U.S. Treasury bills. D. currency in the bank but not currency in the ATM machines.