Determine if each of the products below displays any of the following characteristics:
(i) rivalry
(ii) nonrivalry
(iii) excludability
(iv) nonexcludability.
a. a freeway during peak commute hours
b. an online college course
c. infectious disease prevention
d. open source software such as Linux
e. a movie showing at Century Theatres
a. rivalry due to traffic congestion although entry onto the freeway is nonexcludable
b. nonrival but excludable because those who did not pay for the course may not take the course
c. nonrival and nonexcludable
d. nonrival and nonexcludable
e. nonrival but excludable since admission requires purchase of a ticket
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The best economic case one can make for an active industrial policy involves
A) the national security argument. B) the technological spillover argument. C) the environment preservation argument. D) the high value added argument. E) raising the national income.
Suppose that many households look to the stock market to gauge how the economy is likely to perform in the future
When stock prices are rising, then households will be optimistic about the future state of the economy and will increase their spending on houses and consumer durables, such as cars and furniture. When stock prices are falling, then households will be pessimistic about the future and will cut back on their spending. If this view of the link between stock prices and household spending is correct, then what will be the effect of a decline in stock prices on output in the new Keynesian view? Be sure to distinguish the short run from the long run.
Which of the following emphasizes government spending as a counter cyclical approach to create economic expansion?
a. Keynesian economics b. supply-side economics c. classical economics d. Say’s Law
Which aggregate expenditure schedule AE in the diagram for a private closed economy implies the largest MPC, assuming investment is the same at each level of income?
A. AE 4 .
B. AE 3 .
C. AE 2 .
D. AE 1 .