Tom Searchinger, a senior attorney at the Environmental Defense Fund, observed that generous farm subsidies have encouraged farmers to produce more corn and more wheat. How does this affect the market for fertilizer?
A) The supply of fertilizer increases. B) The demand for fertilizer increases.
C) The supply of fertilizer decreases. D) The demand for fertilizer decreases.
B
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What will arise when negative externalities are present in a market?
a) Government will regulate the externalities in the market. b) Private costs will be greater than social costs. c) The market will not be able to reach any equilibrium situation. d) Social costs will be greater than private costs.
If an economy has a velocity of circulation of 3, then
A) the quantity of money is 3 times real GDP. B) in a year the average dollar is exchanged 3 times to purchase goods and services in GDP. C) nominal GDP is 1/3 the size of the quantity of money. D) the quantity of money is $3 for every dollar of GDP.