Land on both sides of the border of Brazil and Venezuela has long been occupied by the Yanomamo people. These “fierce people” are the last Stone Age tribe left in South America. Following discovery of gold, approximately 45,000 garimpeiros (gold miners) invaded the Yanomamo territory. The mining process pollutes the rivers and scares away game, so traditional Yanomamo sources of food are almost impossible to find now. The Yanomamo are starving. Economists call this problem
A. the cost disease.
B. an externality.
C. specialization.
D. rent seeking.
Answer: B
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The members of Federal Reserve district bank boards of directors who represent the public interest are known as
A) Class A directors. B) Class B directors. C) Class C directors. D) Class D directors.
Why do economists insist on assuming that people behave rationally, when such an assumption is clearly false?
What will be an ideal response?
Which of the following statements is most correct?
A. The Fed can control the size of the monetary base but not the price of its components. B. The Fed can control either the size of the monetary base or the price of its components. C. The Fed can control the amount of reserves, but cannot control the monetary base. D. The Fed can control the make up of the monetary base, but cannot affect the market interest rate.
If the money supply is 2000, the price level is 20, and the inflation rate is 50%, what is the amount of seigniorage?
A) 100 B) 50 C) 10 D) 5