In addition to saving and investment in capital, making an even larger contribution to long-term economic growth in real GDP per person
A) are technological advances.
B) is lower current consumption.
C) is higher current consumption.
D) is a larger work force.
A
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Frictional unemployment comes about because of
A) friction between labor and management. B) a mismatch between skills and available jobs. C) normal labor market turnover. D) a general economic slowdown.
In the country of Bora Bora, consumers buy large quantities of alcohol, tobacco, and coffee. Last year, the prices of these goods each increased by 10 percent. The quantities demanded for these goods fell by 10, 3, and 8 percent, respectively. If the government is thinking about imposing a unit tax on one of these goods, which good should they choose to tax to raise the most tax revenue, and why?
a. Alcohol; because the price elasticity is highest. b. Tobacco; because the price elasticity is lowest. c. Coffee; because it will have the lowest tax elasticity. d. Tobacco; because it will have the highest tax elasticity. e. Alcohol; because the burden of taxation would be more even.
Why does the U.S. government most likely distribute military spending to bases across the country?
a. To encourage support of defense spending b. To limit the power of defense contractors c. To meet the demands of special interest groups d. To ensure that defense budgets are adequate
To correct for the underproduction of products with positive externalities, the government must
A) provide the incentives for the private sector to produce and consume the good. B) provide tougher regulations on the industry. C) increase taxes on the industry. D) fine the industry.