Over-fishing of common fishing grounds happens because fishing grounds are a common property and social and private incentive are the same
Indicate whether the statement is true or false
False. It is the fact that social and private incentives diverge that creates the problem. The profit-maximizing quantity of fish for the fishermen exceeds the social optimal quantity of fish that will maintain the stock. Over-fishing (and maybe extinction) will result.
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Which of the following would cause the money supply in the United States to decrease?
a. an increase in reserve requirements b. a decrease in the discount rate c. a purchase of bonds by the Federal Reserve d. an increase in the world supply of gold
Based on the graph showing a reduction in the growth of the money supply, if the inflation rate remains at 3 percent for a substantial amount of time, people will adjust their expectations regarding the inflation rate to this level, which ______.
a. shifts the short-run Phillips curve to the left
b. shifts the short-run Phillips curve to the right
c. moves the economy back down the Phillips curve to Point A
d. moves the economy back up the Phillips curve to Point B