The term "fiscal policy" refers to
a. the amount of physical output produced by firms
b. the means by which government policy makes firms more productive
c. the avenue by which government influences credit markets
d. spending and taxing by governments
e. a tool of government that works in the opposite direction of monetary policy
D
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Georgia has an MU/P of 10 for tennis lessons, an MU/P of 6 for sewing lessons, and a MU/P of 2 for cooking lessons. In order to maximize utility, she should
a. take more cooking lessons b. take more sewing lessons c. take more tennis lessons d. stay with her current choices e. take fewer lessons of each choice
One reason that private solutions to externalities do not always work is that
a. government intervention negates the benefits of positive externalities. b. some people benefit from externalities. c. interested parties incur costs in the bargaining process. d. charities are not well organized.
Which of the following would both shift aggregate demand right?
a. the price level decreases and government expenditures increase. b. the price level decreases and the government repeals an investment tax credit. c. taxes decrease and government expenditures increase. d. None of the above are correct.
Which of the following characteristics is essential if a good is to be efficiently provided by a market economy?
a. The good should be subject to overuse. b. The good should be subject to the free rider problem. c. The good should be a common resource. d. The good should be excludable and rival in consumption