Which is best considered a supply factor for long-run economic growth?
A. The stock of capital goods.
B. Full employment of resources.
C. Personal consumption expenditures.
D. Government spending.
Answer: A
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What role can the government play in correcting for externalities?
What will be an ideal response?
Which of the following are true?
a. Negative externalities are real costs, but, unlike the other resources a firm uses in production, no one owns the air, so a firm does not have to pay for its use. b. In the case of external costs, firms tend to produce too much from society's standpoint, causing an efficiency loss due to an overallocation of scarce resources to the production of the good. c. If government could impose a pollution tax equal to the exact size of the external costs imposed by a firm, then the firm would produce at the socially desired level of output. d. All of the above are true.
There are fewer farmers in the United States today than 200 years ago because of
a. improvements in farm technology. b. increased government regulations in farming. c. an elastic demand for food. d. environmental programs designed to reduce soil erosion.
What would be the likely result of a recessionary gap? If this leads to a fall in the nominal wage what impact it would have on the aggregate supply curve and on recessionary gap?
What will be an ideal response?