If the market equilibrium quantity is greater than the socially optimal quantity, one can infer that:
A. there is a positive externality associated with this good.
B. the private demand curve for the activity is below the socially optimal demand.
C. there is a negative externality associated with this good.
D. the private supply curve for the activity is to the left of the socially optimal supply curve.
Answer: C
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According to the theory of liquidity preference, the money supply
a. and money demand are positively related to the interest rate. b. and money demand are negatively related to the interest rate. c. is negatively related to the interest rate while money demand is positively related to the interest rate. d. is independent of the interest rate, while money demand is negatively related to the interest rate.
When the more recent observations are more relevant to the estimate of the next period than previous observations, the naïve forecasting method to employ is
A) exponential smoothing. B) compound growth rate. C) trend analysis. D) moving averages.