According to the Keynesian view, the focus of stabilization policies
a. is to keep the economy at its equilibrium level in the face of shocks to aggregate demand.
b. should be to keep the economy at its equilibrium level in the face of shocks to aggregate supply.
c. is on the short run.
d. All of the above
D
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A politician says that the government should tax behavior they want less of and subsidize behavior they want more of. This is an example of
A) cynical behavior in modern democracies. B) failing to consider the alternatives available to the government. C) a concern that people are not rational when they make decisions. D) using incentives to alter behavior.
An ideal pollution control policy: a. would reduce pollution to zero
b. would reduce pollution to the socially efficient level. c. discourage firms from wasting time developing abatement technologies. d. reduce pollution as quickly as possible, regardless of the cost.
The price of a good tends to decrease if there is a shortage of that good in the market
a. True b. False Indicate whether the statement is true or false
In a barter economy,
A) money trades for goods, goods trade for services, and services trade for money. B) goods and services trade for other goods and services. C) some goods are more readily accepted in exchange than others. D) making exchanges takes less time (on average) than in a money economy. E) b and c