Comment on the following statement: "The market demand for public goods is derived in the same way that the market demand for private goods is derived."
What will be an ideal response?
The statement is false. Adding up the amounts that individual buyers are willing to pay for each potential level of output derives the market demands for public goods. Adding up the quantities that each buyer decides to purchase at each and every price derives the market demand for private goods.
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A factory in Techland could not sell 20% of its output during a certain year due to a decrease in demand for its product. Which of the following would have happened if it produced 20% less?
A) Techland's GDP would have been higher. B) Techland's GDP would have been lower. C) Techland's trade deficit would have been less. D) Techland's GDP would have remained the same.
Because of the lag of the effects of changes in monetary policy and the failure of forecasters to anticipate supply-side shocks as well as changes in money demand or velocity, activist policy changes have tended at times during the mid-1970s to
A) accelerate inflation during expansions. B) increase unemployment during recessions. C) accelerate inflation and increased unemployment. D) dampen inflation and decrease unemployment.
There is a(n) ________ relationship between a nation's rate of growth in real GDP per capita and bureaucratic inefficiency
A) direct B) inverse C) proportional D) undefined
According to classical theory, if the aggregate demand curve decreased and the economy experienced unemployment, then:
a. the economy would remain in this condition indefinitely. b. the government must increase spending to restore full employment. c. prices and wages would fall quickly to restore full employment. d. the supply of money would increase until the economy returned to full employment.