If the Federal Reserve is engaging in open market operations designed to expand the money supply, it is probably
a. selling government securities to banks.
b. selling government securities to the public.
c. buying government securities from the public.
d. encouraging banks to exchange their Fed deposits for currency.
C
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Government intervention can increase total welfare when
A) there are costs or benefits that are external to the market. B) consumers do not have perfect information about product quality. C) a high price makes the product unaffordable for most consumers. D) all of the above E) A and B only
Which of the following is an example of an activity that generates positive externalities
a. driving a car b. producing clothing c. washing your car d. education e. building a bridge
An example of a good that is nonexcludable is:
A. cable TV. B. a computer. C. a published scientific discovery. D. a concert.
If we include cash benefits and in-kind benefits available to low-income people, the share of the U.S. population in poverty
A. increases somewhat. B. drops dramatically. C. increases dramatically. D. does not change.