The "principle of rival consumption" applies to which of the following?
A) national defense
B) the free-rider problem
C) the exclusion principle
D) a private good
D
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A technological innovation that increases the marginal physical product of capital would eventually result in a(n)
a. increase in the interest rate b. decrease in the interest rate c. shift to the right of the supply curve of loanable funds d. increase in the quantity demanded of loanable funds and a decrease in the quantity supplied of loanable funds, which leaves the interest rate unchanged e. shift to the left of the supply curve of loanable funds
The taxation principle that says people with higher incomes should pay more in taxes than those with lower incomes is called
A. A flat tax system. B. A regressive tax system. C. Horizontal equity. D. Vertical equity.
Advocates of stabilization policy prefer quick medicine for economic ills. This leads some observers to favor fiscal policy while others endorse monetary policy. Describe the positions of each side in the debate and what seems to be the current consensus.
What will be an ideal response?
The risk premium that investors associate with a bond increases with all of the following except:
A. maturity. B. inflation risk increases. C. an improved bond rating. D. interest-rate risk.