According to monetarists, the money supply ought to be changed
a. at the discretion of the Federal Reserve Board.
b. at the discretion of the president.
c. at a constant annual rate, regardless of economic conditions.
d. Never.
c. at a constant annual rate, regardless of economic conditions.
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The bias in the CPI affects government outlays because the overstatement of inflation
A) means that tax receipts are less than what is needed to cover government outlays. B) decreases government outlays by more than what is justified. C) increases government outlays by more than what is justified. D) decreases social welfare benefits. E) increases fiscal pressure.
The tables above show the marginal costs and benefits from production of paper. If the market is perfectly competitive and unregulated, the efficient level of output
A) is achieved. B) can be achieved by giving paper producers a subsidy. C) can be achieved by imposing a Pigovian tax on paper producers. D) cannot be achieved.
One way the venture capital firm avoids the free-rider problem is by
A) prohibiting the sale of equity in the firm to anyone except the venture capital firm. B) prohibiting members from serving on the board of directors. C) prohibiting the borrowing firm from replacing management. D) requiring collateral equal to the value of the borrowed funds.
Suppose pigs (P) can be fed corn-based feed (C) or soybean-based feed (S) such that the production function is P = 2C + 5S. If the price of corn feed is $2 and the price of soybean feed is $6, what is the cost-minimizing fee combination producing P = 200?
a. C = 100 b. S = 40 c. C = 50, S = 20 d. All points on the P = 200 isoquant would cost the same.