If there are external benefits associated with the consumption of a good or service:
A. The private demand curve will overestimate the true demand curve
B. The private demand curve will underestimate the true demand curve
C. Consumers will be willing to pay for all these benefits in private markets
D. The market demand curve will be the vertical summation of the individual demand costs
B. The private demand curve will underestimate the true demand curve
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Using a figure describing both the U.S. money market and the foreign exchange market, analyze the effects of a temporary increase in the European money supply on the dollar/euro exchange rate
What will be an ideal response?
In order to increase society's well-being, education might be
a. taxed to discourage production b. subsidized to encourage production c. taxed to encourage production d. subsidized to discourage production e. provided without government intervention
Explain what protections and rules are in place for entrepreneurs, which encourages them to innovate
Taxes are reduced by $15 billion and income increases by $75 billion. The value of the tax multiplier is
A. 9. B. -4. C. -5. D. -10.