A good's marginal social cost is defined as its
a. marginal private cost minus the value of any detrimental externality.
b. incidental cost.
c. marginal private cost plus the value of any taxes paid on its production.
d. marginal private cost plus its incidental cost.
d
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Under fiscal stabilization policy in the New Keynesian model, after a negative shock to output,
A) the government increases expenditures and the central bank increases the money supply. B) the government increases expenditures and the central bank decreases the money supply. C) the government decreases expenditures and the central bank increases the money supply. D) the government decreases expenditures and the central bank decreases the money supply.
A debt that rises faster than nominal GDP will impose the following opportunity costs in the future:
a. A permanently higher tax burden. b. A period of inflation. c. Reduced government outlays relative to GDP d. Higher taxes relative to GDP. e. All of the above.
The aggregate demand curve
a. is a horizontal line if the economy is perfectly competitive b. depicts the economy's equilibrium output level at each possible price level c. depicts the economy's equilibrium output at each possible interest rate d. shifts whenever the price level changes e. can slope upward if the Fed changes the money supply
Relative to other developed countries, Germany has been successful in controlling excess health care spending. Which of the following has not been one of the major contributing factors?
a. The fact that Germans see their physicians less often, consume fewer prescription drugs, have lower hospital admission rates than their counterparts in other highly developed countries, and spend more time in the hospital b. The strict division between ambulatory care and hospital care, with most physicians prohibited from treating patients in both settings c. Legislation that limits the growth of health care spending to the growth of wages and salaries d. The explicit tradeoff between service volume and price that keeps overall spending under global budget limits e. A budget-capping mechanism that sets limits on per patient spending by each physician