After spending $400,000 to build your dream home, you recently discovered that after less than one year the foundation is cracking. Further investigation reveals that the contractor used substandard concrete. Is there a role for the public sector in this situation?
There would certainly appear to be since this would come under the source of market failure known as "poor information." First, the public sector has established standards for foundation concrete. Since you discovered these violations after the house was built, the public sector offers laws and a court system for you to recover your losses. Also, if this contractor habitually engages in such activities, the public sector has the power to put him out of business, to protect potential future dream home owners.
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According to Okun's law, if the cyclical unemployment rate increases by 3 percentage points, real GDP growth will decrease by about 3 percentage points
Indicate whether the statement is true or false
Monetary policy should be countercyclical, which implies that it should be loosened during a recession and tightened during periods of inflation
a. True b. False Indicate whether the statement is true or false
Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $20 per ticket, then the
a. demand curve will shift upward by $30, and the price paid by buyers will decrease by less than $30. b. demand curve will shift upward by $30, and the price paid by buyers will decrease by $30. c. supply curve will shift downward by $30, and the effective price received by sellers will increase by less than $30. d. supply curve will shift downward by $30, and the effective price received by sellers will increase by $30.
Labor unions made their largest membership gains in
A. 1900-1915. B. 1915-1930. C. 1935-1950. D. 1965-1980.