The primary advantage of Lindahl pricing is _____
a. that it is easy to calculate
b. that at the price charged, every individual prefers a unique efficient level of output, increasing diversity in how the public good is provided
c. that is necessary for economic efficiency
d. that at the price charged, every individual prefers the same efficient level of output, making it more likely that the politically agreed upon output level is identical to the efficient output level
d
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In Figure 11.1, an increase in the marginal propensity to consume is represented by a change in the consumption function from
A) C1 to C3. B) C3 to C1. C) C2 to C1. D) C1 to C2.
A bank that expects interest rates to fall will
A) want the duration of its assets to be greater than the duration of its liabilities—a positive duration gap. B) want the duration of its assets to be less than the duration of its liabilities—a positive duration gap. C) want the duration of its assets to be greater than the duration of its liabilities—a negative duration gap. D) want the duration of its assets to be less than the duration of its liabilities—a negative duration gap.
Securitization:
A. turns many loans into a single larger asset. B. is an agreement in which a lender gives money to a borrower in exchange for a promise to repay the amount loaned plus an agreed-upon amount of interest. C. is a promise by the bond issuer to repay the loan, at a specified maturity date, and to pay periodic interest at a specific percentage rate. D. turns many loans into a risk-free secure asset.
In 2009, the American Recovery and Reinvestment Act (ARRA) was an example of:
A. budget surplus. B. fiscal restraint. C. fiscal stimulus. D. net exporting.