A merit good is
A. A good or service that society believes everyone is entitled to a minimal quantity of.
B. Income payments for which no goods or services are exchanged.
C. A good society holds to a higher standard in tax regulations.
D. A product that serves as an incentive to produce more output.
Answer: A
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During the period from 1999 - 2008, federal budget deficits
A. were never calculated. B. fell dramatically. C. increased as a percentage of GDP. D. can be regarded as structural.
Which of the following scenarios can be classified as passive policy making?
A) The Federal Reserve cuts the federal funds rate in order to increase economic activity. B) The federal government increases spending in order to create jobs. C) The Federal Reserve adjusts the money supply as appropriate to attain a target rate of inflation. D) Congress increases expenditures in an effort to stimulate economic activity.
The growth rate of real GDP per capita is best captured by subtracting the percentage changes in:
A. both prices and population from the nominal GDP growth rate. B. population from the nominal GDP growth rate, while dividing it by the inflation rate in order to hold prices constant. C. prices from the nominal GDP growth rate and not the population growth. D. population from the nominal GDP growth rate and not the percentage changes in prices.
Which of the following statements is true?
a. Economic theory does not make unrealistic assumptions. b. Economists should not ignore details while focusing on complex problems. c. Abstraction forms an important part of economic analysis. d. The word theory means same for both economists and laymen.