You decide to buy your friend lunch after she helped you study for your exam. This is an example of the economic concept of:

A situation in which a benefit or a cost associated with an economic activity spills over to third parties is called

A) a public good. B) a merit good. C) an externality. D) the free-rider problem.

If the economy is in a recession, the Fed is likely to:

A. buy bonds through open market operations. B. increase the discount rate. C. increase the reserve requirement. D. print more currency.