Which of the following could produce the result indicated by the arrow in the Actual & Potential GDP graph? Check all that apply.
a. An increase in Consumer Spending
b. A decrease in Government Spending
c. An Increase in Taxes
d. A decrease in the money supply
e. An increase in Investment Spending
f. A decrease in Consumer Spending
Answer:
a. An increase in Consumer Spending
e. An increase in Investment Spending
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Incomplete property rights create transactions costs because
a. any party wanting to use the disputed resource does not have a fixed group with which to bargain. b. the use of the disputed resource cannot be fully monitored by the government. c. no one can prevent people from using the disputed resource for free. d. others may receive a higher value from the disputed resource that those who own the property right to it.
Which of the following statements is/are correct?
I. Depository institution managers undertake riskier actions than they otherwise would because of the existence of deposit insurance. II. Because of the existence of deposit insurance, depositors in savings and loans and other banks have little incentive to investigate the financial stability of these institutions. A) I only B) II only C) both I and II D) neither I nor II
When dealing with negative externalities, what is meant by the term "internalizing an externality"?
What will be an ideal response?
Refer to the above figure. From the standpoint of society, the optimal output is
A) Q1 B) Q2 C) Q3 D) Q4