Economic growth is best defined as
A) decreases in potential GDP.
B) increases in potential GDP.
C) rightward shifts of the AD curve.
D) rightward shifts of the SAS curve.
B
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A student athlete is deciding whether to work out for an extra hour. Her marginal benefit from another hour of exercise
A) is the benefit she gets from all the hours she's worked out all week. B) is the benefit she receives from exercising the additional hour. C) is less than the marginal cost of the additional hour. D) depends on the cost of the workout.
If a tax is efficient, it will necessarily be equitable.
A. True B. False C. Uncertain
Because of the free rider problem
a. side payments are necessary in order to achieve an efficient outcome b. a needed side payment can shrink until it is not large enough to compensate losers and still leave gainers better off c. efficient outcomes can never be achieved d. the Coase Theory often applies to real-world situations e. externalities are less common than they would otherwise be
Which of the following statements is correct?
a. A decrease of government spending is most effective in the flat part of the SRAS curve. b. An increase in interest rates is most effective in the flat part of the SRAS curve. c. An increase in the money supply is most effective in the steep part of the SRAS curve. d. A tax increase is most effective in the steep part of the SRAS curve.