Is a sailboat purchased in Victoria, British Columbia, a private good or a public good?
What will be an ideal response?
The sailboat is a private good. The sailboat has none of the characteristics of a public good. First, people can easily be excluded from using the boat. Basically, the only people allowed on the boat are the people the owner allows on the boat. Second, the owner's use of the boat prevents other people from simultaneously using the boat. That is, the owner's consumption of the boat decreases the quantity available for other consumers.
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Everything else held constant, if a central bank makes a sterilized purchase of foreign assets, then the domestic currency will
A) appreciate. B) depreciate. C) either appreciate, depreciate, or remain constant. D) not be affected.
The argument that when policy changes, people's behavior changes so that historical relationships between macroeconomic variables will no longer hold is known as
A) the Phillips curve. B) the policy irrelevance hypothesis. C) hysteresis. D) the Lucas critique.