The government would use production taxes to remedy the problem of substantial:
A. external costs of consumption.
B. external benefits of production.
C. external costs of production.
D. external benefits of consumption
Answer: C
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
The marginal propensity to consume (MPC) can best be defined as that fraction of
A) real disposable income that is not consumed. B) a change in real disposable income that is spent. C) a change in real disposable income that is saved. D) real disposable income that is consumed.
Wage differentials across individual workers are determined in part by
A. effort. B. social capital. C. productivity. D. luck. E. All of these are determinants of wage differentials.
What are the terms of exchange and how are these terms related to the price?
What will be an ideal response?