The U.S. fiscal stimulus in 2009 did not increase GDP substantially because
a. the Federal Reserve was decreasing interest rates and real world estimates for the multiplier might be less than one.
b. the Federal Reserve was increasing interest rates and real world estimates for the multiplier might be less than one.
c. state governments were decreasing spending and real world estimates for the multiplier might be less than one.
d. state governments were increasing spending and real world estimates for the multiplier might be less than one.
c
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If the agent has more information than the principal and there is only one state of nature, then
A) efficiency in both production and risk-bearing can be achieved. B) only efficiency in production can be achieved. C) only efficiency in risk-bearing can be achieved. D) neither efficiency in production nor efficiency in risk-bearing can be achieved.
Compared to a negative income tax, the federal personal income tax is thought of as a way to promote greater equality. Why?
What will be an ideal response?
The opportunity cost of an action is: a. the value of the best foregone alternative
b. the difference between the benefits that result and the expenses incurred as a result of the action. c. the same as the expected benefit of the action. d. the same for everyone who undertakes the action.
Suppose a tax of $5 per unit is imposed on a good, and the tax causes the equilibrium quantity of the good to decrease from 200 units to 100 units. The tax decreases consumer surplus by $450 and decreases producer surplus by $300 . The deadweight loss from the tax is
a. $250. b. $500. c. $750. d. $1,000.