When the government wants to spend money

a. current consumption will fall only if the government borrows.
b. current consumption will fall only if the government raises taxes.
c. current consumption will fall if the government borrows or raises taxes.
d. current consumption will not be affected.


c. current consumption will fall if the government borrows or raises taxes.

Economics

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Comment on the following statement: "When a negative externality is present, and a firm does not factor the additional social cost into its decisions, the firm is likely to produce a level of output that is lower than the efficient level."

What will be an ideal response?

Economics

All of the following are likely results of a negative demand shock EXCEPT

A) a negative output gap. B) lower inflation. C) IS shifts to the left. D) Phillips curve shifts to the left.

Economics

Consider a housing development built near an existing airport. After the houses are occupied, homeowners complain that the airport imposes a negative externality on them and it should be moved or otherwise limited

Is the airport a negative externality? A) No, the airport was there first. B) No, if the original property values reflect the costs imposed by the airport. C) No, airports are government entities and therefore don't impose costs on individuals. D) Yes, the airport's noise should be curtailed for the well-being of the homeowners.

Economics

In general, the number of years it will take for income to double at the current real growth rate is approximately:

A. 70 divided by the growth rate. B. 7 times the growth rate. C. 50 divided by the growth rate. D. 5 times the growth rate.

Economics