If a fiscal stimulus package is enacted after the end of the recession it was intended to cure, this is an example of
A. An implementation problem.
B. A design problem.
C. A measurement problem.
D. A goal conflict.
Answer: A
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In response to the sharp decline in stock prices in October 1987, the Federal Reserve
a. increased interest rates, and the economy avoided a recession. b. increased interest rates, but the economy was unable to avoid a recession. c. decreased interest rates, and the economy avoided a recession. d. decreased interest rates, but the economy was unable to avoid a recession.
Suppose that a vaccine is developed for a highly contagious strain of flu. The likelihood that anyone will get this flu decreases as more people receive the vaccine. One of the demand curves below represents the private demand for the vaccine and the other represents the social demand for the vaccine.
At the private market equilibrium, the deadweight loss is ________ per day.
A. $0 B. $500 C. $250 D. $125