The free-rider problem occurs for:
A. private goods and public goods.
B. private goods but not public goods.
C. public goods but not private goods.
D. neither public nor private goods.
Answer: C
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An increase in the price level ________ real wealth, which causes consumption to ________
A) lowers; decrease B) raises; decrease C) lowers; increase D) raises; increase
Assume a market that has an equilibrium price of $8. If the market price is set at $7, consumer surplus:
A. rises for some because of the decreased price. B. decreases for some because of fewer transactions taking place. C. Both of these statements are true. D. Neither of these statements is true.
In 1990, the GDP of Canada was $680 billion as measured in Canadian dollars, and the exchange rate was that $1 Canadian was worth 85 U.S. cents. In 2000, the GDP of Canada was $1000 billion as measured in Canadian dollars, and the exchange rate was that $1 Canadian was worth 69 U.S. cents. By what percentage did the GDP of Canada increase from 1990 to 2000 in Canadian dollars?
a. 19.4% b. 47% c. 68% d. 147%
Though many assets can be used as a store of value, money is a particularly attractive method to store value because:
A. it increases in value as prices rise. B. its purchasing power does not decline when prices rise. C. it is the most liquid of all assets. D. it is backed by gold.