A positive externality arises in a situation where a third party, who is not part of a market transaction, _____
a. fails to allocate resources efficiently
b. suffers from a market transaction by others
c. benefits from a market transaction by others
d. pays a pollution tax to balance social costs
c
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For several years, the U.S. unemployment rate has been below the European unemployment rate. Offer a Keynesian explanation for this
What will be an ideal response?
Unions in general, and teachers' union in particular, prefer that salaries be based solely on ________ of the worker.
A. education and income class B. gender and seniority C. education and seniority D. gender and education
Budget deficits are appropriate during
A. recessions, but not inflations. B. inflations, but not recessions. C. recessions and inflations. D. neither recessions nor inflations.
The intersection of the IS and LM curves shows
A. the short-run trade balance. B. that the balance of payments is in equilibrium. C. the short-run equilibrium interest rate and the output level in the economy. D. the long-run equilibrium inflation rate and the natural rate of unemployment in the economy.