What happens to U.S. GDP when foreign countries experience prosperity?
A) It increases because the United States will export more product to those countries.
B) It does not change because U.S. GDP is not affected by other countries' prosperity.
C) It decreases because the foreign countries will be able to export more at a lower cost.
D) It decreases because the foreign countries will now buy more of their own products.
A
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Private ownership will lead to better incentives and better social decisions in a regulated firm
Indicate whether the statement is true or false
Under the law of supply, any decrease in price will cause ________ in quantity supplied
a. an increase b. no change c. a decrease d. constant change
Suppose that a monopoly firm is required to pay a new annual license fee to do business in its city and that the fee is somewhat less than the economic profit the firm is now earning. In response to the increase in fees, the firm will:
a. not change its price. b. raise its price by somewhat more than amount of the license fee. c. raise its price by less than the amount of the license fee. d. raise its price by the amount of the license fee.
You do not worry about how your bank is investing your money because your deposits are federally insured. This is an example of:
A. a positive spillover. B. moral hazard. C. adverse selection. D. irrational behavior.