If prices rise, then persons living on fixed incomes will
A. see their real incomes rising.
B. see the purchasing power of their dollars go further.
C. need to spend more to maintain their standard of living.
D. see the value of their savings accounts increase.
Answer: C
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The profitability of an investment project will increase if
A. tax rates increase. B. real interest rates increase. C. real interest rates decrease. D. business tax deductions decrease.
Many manufactured goods have an ________ supply if production plans have only a short period to change and as time passes and all production adjustments are made, the supply of the good ________ from the initial response
A) inelastic; increases B) elastic; decreases C) elastic; increases D) inelastic; decreases E) inelastic; does not change
Healthcare provided by the government is an example of a public good
a. True b. False Indicate whether the statement is true or false
According to Pigou, the best way to deal with a negative externality is to
A. tax it. B. allow both parties to negotiate. C. assign liability to the party with the highest cost of prevention. D. assign liability to the party with the lowest cost of prevention.