When negative externalities are present in a market
a. private costs will be greater than social costs.
b. social costs will be greater than private costs.
c. only government regulation will solve the problem.
d. the market will not be able to reach any equilibrium.
b
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What happens to prices and unemployment when aggregate demand changes in the intermediate zone?
a. They do not change. b. They both decrease. c. They both increase. d. They move in opposite directions.
An increase in the supply of the product implies:
A. producers will now charge a higher price for a given quantity of output. B. the supply curve will shift to the left. C. the price of this product has increased. D. producers will now charge a lower price for a given quantity of output.
(Advanced analysis) Assume that the MPS is .33 in an economy that has an aggregate supply curve with a slope of 1. An increase in investment spending of $10 billion will shift the aggregate demand curve rightward by:
A. $30 billion and increase real GDP by $15 billion. B. $30 billion and increase real GDP by $30 billion. C. $10 billion and increase real GDP by $30 billion. D. $10 billion and increase real GDP by $10 billion.
In the short run in the Keynesian model, a sharp increase in oil prices would leave the economy with a ________ level of output and a ________ real interest rate.
A. higher; lower B. lower; higher C. lower; lower D. higher; higher