A decrease in government spending would
a. lower the interest rate, which is unlikely to influence private investment spending
b. raise the interest rate and decrease private investment spending
c. lower the interest rate and decrease private investment spending
d. raise the interest rate and increase private investment spending
e. lower the interest rate and increase private investment spending
E
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A benefit-based standard
a. is one that balances social benefits with social costs, at the margin b. achieves allocative efficiency c. achieves a cost-effective level of pollution abatement d. is set to improve society’s well-being without consideration for costs
The accountant's definition of profits, or the definition used for tax purposes, is not wholly satisfactory from the economist's point of view because
A) accountants are paid by business firms and consequently tend to exaggerate the size of profits. B) accountants deal with empirical data while economists are interested in theoretical explanations. C) accountants tend to minimize profits in order to avoid the payment of unnecessary taxes. D) accounting costs do not include the entrepreneur's opportunity costs.
Define and distinguish between final goods and intermediate goods
What will be an ideal response?
A firm deciding to hire a secretary, bases its decision on how well the candidate is trained on certain software. This practice addresses:
a. Adverse selection b. Moral hazard c. Forced bankruptcy d. None of the above