Which of the following is not a valid explanation for government provision and forced consumption of education?
a) myopic individuals make time-inconsistent decisions
b) education is a public good
c) forced education redistributes income
d) education has positive externalities, or benefits to non-consumers
e) education enhances human capital and raises GDP
b) education is a public good
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Comment on the ability of a credible nominal anchor to allow policy makers to exploit a short-run trade-off between unemployment and inflation
What will be an ideal response?
An efficient tax system is one that imposes small deadweight losses and small administrative burdens
a. True b. False Indicate whether the statement is true or false
Why does a government impose controls or restrictions on converting domestic currency to foreign currency (capital controls)?
a. The government is trying to stop the rapid decline in value of the domestic currency. b. The government wants to speculate on its own currency c. The government is trying to suppress international trade d. The government is trying to avoid imposing taxes on citizens.
When domestic prices rise,
A. people buy fewer imported goods. B. exports rise. C. exports fall. D. business investment rises because interest rates fall.