Why does capital depreciate?
What will be an ideal response?
Capital can depreciate because it wears out physically or because it becomes obsolete.
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During the financial crisis of 2007-2009, why did the Federal Reserve begin to utilize various types of unconventional monetary policy?
a. the federal funds rate had already been increased as much as possible b. the discount rate had already been increased as much as possible c. the federal funds rate had already been reduced to zero d. the discount rate had already been reduced to zero
Jim’s Limited Leather dumps its tanning chemicals into a creek that it claims to own. Jim’s only neighbor, Mr. Glover, claims he owns the creek, and the chemicals are killing his fish. Why would it be impractical to apply the Coase theorem to find a workable solution in this case?
a. There are too many transactors. b. There is no externality. c. Property rights are uncertain. d. Leather is a private good.