Monetarist economists might conclude that the accelerator hypothesis supports their position via fiscal policy since
A) the gap between the desired capital stock and the existing capital stocks is closed slowly.
B) a change in expected sales will not increase output.
C) V? will be smaller than expected.
D) All of the above are correct.
A
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Refer to the figure above. What is the equilibrium wage rate and equilibrium level of employment?
A) $35 and 10 units of labor B) $20 and 15 units of labor C) $15 and 35 units of labor D) $25 and 20 units of labor
The short-run market supply curve is
A) the sum of the quantities supplied by all the firms. B) undefined because the number of firms is constant in the short run. C) vertical at the total level of output being produced by all firms. D) horizontal at the current market price.
A country has pasture land where cattle are allowed to graze. However, this land is threatened by overgrazing, which can lead to erosion and a reduction in the value of the land. Which of the following solutions is socially optimal?
a. Selling the pasture land to a private buyer and letting him control the grazing time b. Providing extra security to prevent grazing c. Using a layer of artificial grass to prevent grazing d. Constructing fences and allowing grazing only in one part of the pasture land at a time
Explain the concept of externality and give an example