Government can overcome the free rider problem by collecting taxes and using the funds to provide individuals with nonexcludable public goods that they want to buy but the market cannot provide.
Answer the following statement true (T) or false (F)
True
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By 2010, the U.S. economy had emerged from the recession that had begun in 2007. Despite an economic growth rate well above zero, unemployment showed little sign of declining much below ten percent
Focusing on the definition of the unemployment rate, explain how it is possible to have positive economic growth without declining unemployment.
Refer to Figure 2.2. Which diagram represents the effect of a lower gasoline price on the supply of gasoline?
A. A
B. B
C. C
D. D
One important reason why the U.S. government is not likely to go bankrupt even with a large public debt is that it has:
A. the ability to refinance debt as it comes due by selling new bonds. B. the ability to decrease interest rates and increase investment spending. C. s strong military to protect it from creditors. D. the capacity to pay off its outstanding debt with gold.
The focus of the Ricardian model is on how:
a. countries' resource bases explain international trade. b. countries' different technologies explain international trade. c. transportation costs explain international trade. d. different languages and cultures explain international trade.