Gresham's Law
A) deals with the theory of regulatory forces in the economy.
B) is the tendency for good money to drive bad money out of circulation.
C) is the tendency for bad money to drive good money out of circulation.
D) was passed in 1913, as part of the Federal Reserve Act.
Ans: C) is the tendency for bad money to drive good money out of circulation.
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
The U.S. government has frequently used a "command-and-control" approach in dealing with pollution. Which of the following describes this approach?
A) The government uses taxes in order to internalize the externalities caused by pollution. B) The government uses subsidies to encourage firms to use new technology that reduces pollution. C) The government imposes quantitative limits on the amount of pollution firms are allowed to generate. D) The government distributes information to consumers and producers on how to reduce pollution.
A Roth IRA differs from a traditional IRA in that
A. the Roth IRA allows for savings towards retirement. B. the Roth IRA is phased out at certain income levels. C. the Roth IRA is not tax deductible at the time it is deposited. D. all of these answer options are correct.
An assumption on the LRAS curve is
A) technology remains unchanged. B) an increase in the average price level occurs. C) the economy is operating to the right of the production possibilities curve. D) labor productivity is increasing.