A government subsidy is typically used
A. to reduce inflation.
B. to provide a government-inhibited good.
C. to correct a positive externality.
D. to correct a negative externality.
Answer: C
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Demand-pull inflation is caused by
A) aggregate demand increasing along an upward sloping or a vertical aggregate supply curve. B) aggregate demand decreasing along an upward sloping or a vertical aggregate supply curve. C) aggregate demand increasing along a horizontal aggregate supply curve. D) aggregate demand decreasing along a horizontal aggregate supply curve.
A bond issued by a local government to build a convention center that is to be financed by fees charged to users is an example of
A) commercial paper. B) a general obligation bond. C) a collateralized bond. D) a revenue bond.
Diversification reduces the risk that ________ face with ________ cost.
A) firms; little to no B) shareholders; little to no C) firms; zero D) shareholders; high
Suppose the economy experiences a recessionary gap. Expansionary monetary policy will
A) increase interest rates and increase exchange rates. B) increase interest rates and decrease exchange rates. C) decrease interest rates and increase exchange rates. D) decrease interest rates and decrease exchange rates.