When the government bans a good it:
A. creates a more efficient solution than any other to the nonexcludability problem.
B. is an easy, but often ineffective, solution to the nonexcludability problem.
C. increases surplus more than any other solution to the nonexcludability problem.
D. is the easiest and most effective solution to the nonexcludability problem.
B. is an easy, but often ineffective, solution to the nonexcludability problem.
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For the CPI, the market basket of goods and services is modified
A) each time the Consumer Expenditures Survey is conducted. B) about every 10 to 20 years. C) each month when the Price Survey is completed. D) each year to reflect changes in consumer purchasing habits. E) at the discretion of the President.
The "interest rate effect" can be described as an increase in the price level that raises the interest rate and chokes off
A) investment and consumption spending. B) government spending. C) government spending and unplanned investment. D) net exports.
If the government were to decrease its spending, it would expect aggregate demand to:
A. fall, and thus GDP to fall. B. rise, and thus GDP to fall. C. fall, and thus GDP to rise. D. rise, and thus GDP to rise.
Nominal GDP measures changes in:
A. Output only. B. Output and prices. C. Income transfers. D. Prices only.