One of the reasons that Real Gross Domestic Product is not synonymous with social welfare is
A. people substitute between goods.
B. quality has remained steady.
C. things produced by people under 18 are not counted.
D. it treats all spending the same (spending on military hardware is treated the same as spending on education).
Answer: D
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A market with a negative externality
a. will be regulated by the government b. is an example of a natural monopoly c. will be Pareto efficient, as long as bargaining costs are high enough d. will produce less than the efficient quantity, thereby creating a welfare loss e. will produce more than the efficient quantity, thereby creating a welfare loss
If product price increases, then:
a. MP will decrease. b. MRP will increase. c. MFC will increase. d. MP will increase.
When the Fed wants to undertake open market operations, it
A. buys or sells securities through the trading desk at the New York Federal Reserve Bank. B. can require all member banks to buy from or sell to it. C. buys from or sells to the U.S. Treasury. D. can require all commercial banks to buy from or sell to it.
The upward-sloping short run aggregate supply curve shows the ___________ relationship between the price level and the level of real GDP in the short run.
a. positive b. negative c. neutral d. bi-modal