A pure public good is _____ and _____
a. nonexcludable; private in consumption
b. excludable; private in consumption
c. excludable; collective in consumption
d. nonexcludable; collective in consumption
d
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Richard receives government transfer payments and currently consumes five guns and six goose livers. Assume the price of guns decreases by 10% and the price of goose liver increases by 20%
The government raises Richard's transfer payments so he can still afford five guns and six goose livers. Does this constitute a true cost-of-living adjustment? A) No. Richard is overcompensated. B) No. Richard is undercompensated. C) Yes. The payment just achieves the right level of compensation. D) Not enough information.
The interest rate the Fed pays banks on their reserve holdings
A) guarantees a specific federal funds rate. B) sets a ceiling for the federal funds rate. C) sets a floor for the federal funds rate. D) has no impact on the federal funds rate.