The existence of externalities is due mainly to the fact that
A) monopolies tend to produce too little of a good anyway.
B) the optimal level of pollution is zero.
C) pollution is not a serious problem.
D) property rights are poorly defined.
D
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Who is recognized as the founder of public choice theory?
a. James Buchanan. b. Steve Forbes. c. Joseph Pechman. d. Adam Smith.
Which of the following is an example of an automatic stabilizer?
A. The reduction in the money supply that occurs as banks become less willing to make loans during a recession B. The reduction in real wages that occurs as the economy goes into a recession C. The increase in government spending that occurs as the result of new spending bills passed by Congress D. The rise in tax revenue that occurs as a result of growth in real GDP
There is an indirect relationship in the short run between actual price level and real GDP
Indicate whether the statement is true or false
Suppose the economy is in long-run and short-run equilibrium. The Fed changes its policy by raising the difference between the discount rate and the federal funds rate. In the long run we would expect to observe
A. a lower price level. B. a higher real national income. C. a higher price level. D. a lower real national income.