Government debt ________ the amount of savings available to firms and thus ________ the amount of capital in the economy
A) decreases; increases B) increases; decreases
C) decreases; decreases D) increases; increases
C
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One characteristic of a Giffen good is that it
A) is a luxury good. B) is an inferior good. C) has an upward-sloping Engel curve. D) All of the above.
Suppose John Smith pays $100 to Thomas Jefferson. What does this do to GDP?
A. We can say with certainty that the nominal GDP has increased, but we can't say whether real GDP has increased or decreased. B. We can say with certainty that the GDP has increased by $100. C. We need more information to determine whether GDP has changed. D. We can say with certainty that the GDP has increased, but we cannot determine the amount.
Implicit collusion occurs when oligopolistic firms negotiate a common price.
Answer the following statement true (T) or false (F)
To correct for the underproduction of products with positive externalities, the government must
A) provide the incentives for the private sector to produce and consume the good. B) provide tougher regulations on the industry. C) increase taxes on the industry. D) fine the industry.