Government Securities

Economics 1 Proctored Final 

PART-A

1) Why is the right of property an essential characteristic of a market system

2) Rivalry and excludability are two characteristics of goods that are produced through the competitive market system. Compare and contrast the difference in private and public goods based on these two characteristics. Then, explain the concept of free-rider problem with public goods.

3)How do economists distinguish the absolute and relative sizes of the United States public debt? Why is the distinction important?

Part B

1. State At least one economic benefit to increase international trade.

2. Why might a corporation prefer to obtain financing through bonds instead of stocks? In contrast, why might a corporation prefer to obtain financing through stocks instead of bonds?
3. Is a credit card considered to be money? Explain.

4. Explain what is meant by command economy.

5. Why does completion force firms to use the least-cost, most efficient productive techniques?

6. Explain the aspects of expansionary and contractionary fiscal policy. During which phases of the business cycle would each be appropriate?

7. When measuring the GDP for a particular year, why do economists include only final goods? Why don’t they include the value of stocks and bonds sold?

8. What is meant when economists say that the Federal Reserve bankers’ banks?

9. What is the effect on the money supply when a commercial bank buys government securities from the public?