If the economy is self-regulating and in a recessionary gap, what happens?
A) Wages rise, the SRAS curve shifts leftward, and both Real GDP and the price level rise.
B) Wages fall, the SRAS curve shifts leftward, the price level rises, and Real GDP falls.
C) Wages fall, the SRAS curve shifts rightward, and both the price level and Real GDP fall.
D) Wages fall, the SRAS curve shifts rightward, the price level falls, and Real GDP rises.
E) none of the above
D
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Economist A.C. Pigou argued that to deal with a negative externality in production, the government should impose a tax equal to the cost of the externality
What did Pigou believe should be done in the case of a positive externality in consumption? How would his recommendation impact the demand and market equilibrium for the product which is generating the positive externality?
Over the past few years, airlines have tended to compete in the market for intercontinental business class travelers on the basis of:
A) price. B) cost. C) timeliness of their flight schedules. D) amenities.
Strategic trade policy relies on threats of protectionism to protect free trade
a. True b. False Indicate whether the statement is true or false
In the U.S. economy, housing accounts for over half of all consumer expenditures.
Answer the following statement true (T) or false (F)