Despite the appealing logic of the Coase theorem, private actors often fail to resolve on their own the problems caused by externalities
a. True
b. False
Indicate whether the statement is true or false
True
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Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
The figure above illustrates aggregate demand and aggregate supply in Sparta. Sparta's price level will rise above 100 if ________
A) government expenditure decreases B) the quantity of money increases C) the quantity of capital increases D) taxes increase
The political business cycle involves the ________
A) expenditure of substantial funds by industry lobbyists to manipulate government regulation B) movement of individuals from government employment to positions within the industry they had previously participated in regulating C) use of expansionary fiscal policy just prior to elections D) election of government officials who are supportive of the government sector
Amy can produce either 5,000 pounds of cheese or 20 cars per year. Mike can produce either 5,000 pounds of cheese or 10 cars per year. By the principle of comparative advantage, Amy should specialize in producing
A. both cheese and cars. B. cheese. C. neither cheese nor cars. D. cars.