Expansionary fiscal policy will shift the AD curve leftward
Indicate whether the statement is true or false
FALSE
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Assuming that the two key restrictions on preferences fundamental to the median voter model hold, list the condition that must be satisfied for the outcome preferred by median voter to be considered economically efficient
List one real world example that comes close to this condition.
People who hold well-diversified portfolios of stocks have greatly reduced or eliminated
a. firm-specific risk, and so they do not need to worry about their wealth decreasing as a result of recessions. b. market risk, and so they do not need to worry about their wealth decreasing as a result of recessions. c. firm-specific risk, but still they have reason to worry about their wealth decreasing as a result of recessions. d. market risk, but still they have reason to worry about their wealth decreasing as a result of recessions.
All of the following are choices for the polluter when faced with additional costs to abate the externality EXCEPT
A) ignore the government regulations. B) install pollution abatement equipment. C) reduce the pollution-causing activity. D) pay the price to pollute.
A fixed exchange rate system reduces the impact of
A) variations in the demand for real money balances on real incomes. B) the volatility of aggregate expenditures on real incomes. C) crowding out from fiscal expenditures. D) the beggar-thy-neighbor effect.