Many economists believe that if fiscal policy turns contractionary to reduce the deficit,
a. monetary policy can turn expansionary to counteract the effects on aggregate demand.
b. monetary policy must be contractionary to reinforce the good effects of contractionary fiscal policy.
c. foreign investment in the United States must be encouraged.
d. taxes on the earnings from stock market gains should be increased.
a
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Refer to the figure above. The consumer surplus before the tax is imposed is given by the area ________
A) BCJ B) BAH C) CAE D) JBHF
Compare two situations. (A ) A firm is not legally responsible for damages that result from air pollution caused by its production of steel. (B ) A firm is legally responsible for damages that result from its production of steel
Ronald Coase argued that if the property rights are assigned and transactions costs are low A) bargaining between the firm and the victims of the air pollution caused by the firm would lead to an equal reduction in pollution in situation (A ) and situation (B ). B) bargaining between the firm and the victims of the air pollution caused by the firm would lead to a greater reduction in pollution in situation (A ) than situation (B ). C) bargaining between the firm and the victims of the air pollution caused by the firm would lead to a smaller reduction in pollution in situation (A ) than situation (B ). D) bargaining between the firm and the victims of the air pollution caused by the firm will result in little reduction of pollution in either situation (A ) or (B ) because the firm has greater economic and political power than the victims.
Authors are allowed to be monopolists in the sale of their books in order to
a. encourage authors to write more and better books. b. correct for the negative externalities that the Internet and television impose. c. satisfy literary advocacy groups that exercise their lobbying power. d. promote a society in which people think for themselves and learn from whichever books they please.
Refer to the information provided in Figure 23.6 below to answer the question(s) that follow.
Figure 23.6Refer to Figure 23.6. If aggregate income is $1,000, aggregate consumption is
A. $850. B. $910. C. $920. D. $960.