The online encyclopedia known as Wikipedia is an example of a public good that provides information. Explain why this good did not need to be provided by the government
What will be an ideal response?
It didn't need to be provided by the government because there is enough of a spirit of public service in society to keep the effort going without coercion or inducement by government. That is people are willing to make their contributions to the encyclopedia because doing so gives them pleasure. This reward apparently is enough to sustain itself.
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The size of the underground economy would tend to decrease if the government of a country
A) increased income tax rates. B) increased business taxes. C) decreased government regulations on businesses. D) made over-the-counter drugs illegal.
When the unemployment rate _________ the natural unemployment rate, real GDP is _________ potential GDP and the output gap is _________
A. exceeds; below; negative B. is below; below; negative C. exceeds; above; positive D. is below; above; negative
The advantage of a "buy-and-hold strategy" is that
A) net profits will tend to be higher because there will be fewer brokerage commissions. B) losses will eventually be eliminated. C) the longer a stock is held, the higher will be its price. D) profits are guaranteed.
This Application refers to quantitative easing, a policy that occurs when the Fed
A) changes the reserve requirement. B) purchases long-term securities. C) raises the discount rate. D) sells mortgage-backed securities.