Refer to the graph. The economy begins at a level of output of $20 billion and experiences a one year recession in which output declines by 4 percent. By what rate must the economy expand to return to potential output by year 2?
A. About 8 percent
B. About 10 percent
C. About 6 percent
D. About 4 percent
Answer: A
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If rent seeking was, on average, a losing proposition, _____
a. rent seekers would exit rent seeking until losses from rent seeking equaled zero b. rent seeking would stop because it was no longer profitable c. rent seekers would increase competition for scarce benefits d. rent seeker would exit rent seeking until there is a normal rate of return to rent seeking
Suppose that the federal government imposes a price floor (support price) in the milk market at a price of $3 per gallon. If market quantity demanded at $3 is 1 billion gallons, and if market quantity supplied is 1.5 billion gallons, then which of the following is true?
a. There is a surplus of 1 billion gallons of milk, and the federal government will buy 1.5 billion gallons to maintain the $3 price. b. There is a shortage of 500 million gallons of milk, and the federal government will buy 1 billion gallons to maintain the $3 price. c. There is a shortage of 500 million gallons of milk, and the federal government will buy an additional 500 million gallons to maintain the $3 price. d. There is a surplus of 500 million gallons of milk, and the federal government will buy this 500 million gallons to maintain the $3 price.
Bao want to buy a new car, so she opens a new savings account and every month deposits some money there to save for a down payment. Even though it will take her a while to save up enough money, Bao knows that the money she is saving will maintain its approximate value. This scenario best illustrates money’s function as a ______.
a. means of deferred payment b. store of value c. unit of account d. medium of exchange
Which of the following is most likely an example of a free good?
A) Sand in aquarium B) Sand in the middle of a desert C) Sand in a children's sandbox D) Sand at the beach