The possibility that someone can reap the benefits of being a free rider occurs
a. when negative externalities exist in the market
b. only when the market is in equilibrium
c. when positive externalities exist in the market
d. only if government is willing to subsidize the market
e. only if government actually produces the good, such as a highway
C
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Salt, for example, as it is used in part of Ethiopia, is an example of
A) commodity money. B) commodity-backed paper currency. C) barter currency. D) fiat money.
If the marginal propensity to consume is equal to 0.70 and income rises by $20 billion in an economy, then consumption spending will increase by: a. $6 billion
b. $14 billion. c. $20 billion. d. $28 billion. e. $67 billion.
During the first year of the Obama administration in 2009, the American economy experienced
A. low unemployment. B. stagnation. C. slow rate of growth. D. deflation.
Answer the following questions true (T) or false (F)
1. The index of leading economic indicators of business activity is designed to indicate business fluctuations before they occur. 2. The producer price index accounts for changes in the prices of goods and services purchased by consumers. 3. The short run Phillips curve illustrates the relationship between the rate of inflation and the unemployment rate.