When What People Pay Does Not Necessarily Reflect the Real

question 9

Multiple Choice

When what people pay does not necessarily reflect the real value they put on a good,it is likely that the:

• A) free rider problem exists.
• B) good will be oversupplied.
• C) good is easily excludable.
• D) good is nonrivalrous.

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Definitions:

Large Denomination

Notes or coins of high value in circulation within the monetary system.

Time Deposits

Banking term for deposit accounts that have a fixed term and typically offer higher interest rates than regular savings accounts.

M2

M2 refers to a measure of the money supply that includes cash, checking deposits, and easily convertible near money.

M3

A measure of the money supply that includes M2 plus large time deposits, institutional money market funds, and other large liquid assets.