The recessionary GDP gap represents the
A. Leakages minus injections.
B. Amount by which aggregate demand must increase to reach full employment.
C. Value of the goods and services that could be produced but were not due to unemployed resources.
D. Amount by which actual investment differs from desired investment.
Answer: C
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A key contribution of Ronald Coase is that he pointed out that private transactions are efficient when the number of parties involved is small
A) and when property rights are well defined and transactions costs are low. B) and when property rights do not exist. C) and that property rights are irrelevant to the existence of externalities. D) and when corporations are not greedy.
Individuals who do harm to others while behaving irresponsibly or negligently would, in most U.S. states, encounter
A. limitation on their civil liability. B. unlimited civil liability. C. total elimination of all civil liability. D. free public provision of a competent defense attorney.
Which of the following will shift the domestic SAS curve up?
A. Reducing unemployment insurance B. Lowering wages C. Increasing unemployment insurance D. Increasing productivity by retraining
Monopolists attempt to capture producer surplus in the form of profits by using price discrimination.
Answer the following statement true (T) or false (F)