Goods and services provided by state and local governments are:
A. included in GDP at cost.
B. excluded from GDP because they are not sold in markets.
C. excluded from GDP because they are publicly provided.
D. included in GDP at market prices.
Answer: A
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A chemical factory and a fishing club share a lake. Producing chemicals creates water pollution that harms the fish. Initially the lake is owned by no one
Keeping in mind the Coase theorem, suppose transactions costs are low and the fishing club is given ownership of the lake. Compared to the situation with no property rights, the quantity of chemicals produced A) will decrease. B) will stay the same. C) will increase. D) changes, but the direction of the change is ambiguous.
Mortgage backed securities had a role in the 2008 financial crisis
Indicate whether the statement is true or false
If the interest rate falls, the opportunity cost of holding money __________ and the quantity demanded of money __________
A) rises, rises B) rises, falls C) falls, rises D) falls, falls
Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described, if the market price of hammers increased from $9 to $13:
A. Lace Hardware Hardware's producer surplus would increase by $3. B. House Depot's producer surplus would increase by $4. C. Bob's Hardware's producer surplus would remain unchanged. D. All of these statements are true.