Governments are most effective at providing pure private goods
Indicate whether the statement is true or false
FALSE
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The economy suffered a mild recession in 2001. Despite the recession, home sales and durable goods sales remained high. Which of the following is a plausible explanation?
A) The Fed's pursuit of contractionary policy stimulated these markets. B) The Fed caused a reduction in the federal funds rate to its lowest level in 40 years. C) Home building and consumer durable purchases are always high during a recession. D) Rising inflation encouraged many to invest in the real estate market.
Refer to Figure 19-4. The equilibrium exchange rate is originally at A, $3/pound. Suppose the British government pegs its currency at $4/pound
Speculators expect that the value of the pound will drop and this shifts the demand curve for pounds to D2. If the government abandons the peg, the equilibrium exchange rate would be A) $4/pound. B) $3/pound. C) $2/pound. D) less than $2/pound.
It takes Anne 3 hours to make a pie and 4 hours to make a shirt. It takes Mary 2 hours to make a pie and 5 hours to make a shirt. Anne should specialize in making shirts and Mary should specialize in making pies, and they should trade
a. True b. False Indicate whether the statement is true or false
“In the last four months, GDP has been declining and many sectors have shown a contraction in business activity. Still, employment has remained constant. We are currently in a recession.” Evaluate this statement.
What will be an ideal response?