An example of a private solution to externalities is charities. The government encourages this private solution by allowing ___________
Fill in the blank(s) with correct word
tax deductions for charitable donations
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The consumption function shifted upward from 1960 to 2013 because as economic growth brought ________ expected future income and ________ wealth, people chose to ________ their consumption expenditure from a given level of income
A) higher; greater; decrease B) lower; greater; increase C) higher; less; increase D) higher; greater; increase E) higher; less; decrease
A difficulty with effective fiscal policy is the:
A. reality of time lags. B. guess as to what potential GDP is. C. lack of relevant information needed to decide the magnitude of change. D. All of these are true.
The reason relative purchasing power parity (RPPP) is better at predicting exchange rates than absolute purchasing power parity (APPP) is because:
a. Actually, it is the other way around. APPP has been shown empirically and theoretically to be a more accurate way to predict exchange rates. b. APPP deals only with countries that have some sort of imbalance like hyperinflation. RPPP deals with any and all countries, which makes the job of predicting exchange rates easier. c. APPP has to begin and end in parity. RPPP just requires that the initial disequilibrium remain the same. d. APPP predictions are often biased because of central bank controls, sticky prices, and protectionism. RPPP can abstract from these problems.
What is being depicted in this graph showing the union sector?
a. By restricting membership, a union can limit supply and raise wages.
b. When a union lowers quantity from Q 1 to Q 2 , wages also move lower.
c. By keeping salaries below S 1 , the union restricts the number of workers.
d. Collective bargaining improves union wages, quality, and salaries.