Household spending on education is included in
a. consumption, although it might be argued that it would fit better in investment.
b. investment, although it might be argued that it would fit better in consumption.
c. government spending, based on the fact that most higher-education students attend publicly-supported colleges and universities.
d. None of the above is correct; in general, household spending on services is not included in any component of GDP.
a
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What replaced the Bretton Woods system?
a. the gold standard b. a pooled currency system c. a free float system d. a managed float system e. fixed exchange rates
The free rider problem occurs when
a. individual gainers will not contribute the side payment needed for an efficient outcome b. those harmed will not contribute the side payment needed for an efficient outcome c. side payments are not necessary for an efficient outcome d. the marginal cost of arranging a side payment is zero e. the total cost of arranging a side payment is zero
If we were to change the interpretation of the term "loanable funds" in such a way that government budget deficits would affect the demand for loanable funds, rather than the supply of loanable funds, then
a. crowding out would not be a consequence of an increase in the budget deficit. b. higher interest rates would not be a consequence of an increase in the budget deficit. c. an increase in the budget deficit would cause the demand for loanable funds to decrease. d. we would be making only a semantic change in how we analyze the effects of government budget deficits.
The reason that this scenario perfectly illustrates the problem of "moral hazard" in particular is that
Suppose that engineers designed a revolutionary american football helmet that greatly increased the amount of protection for players' heads. Unfortunately however, after the new helmets were introduced, there was an INCREASE in head injuries! This happened because players started taking greater risks on the field due to the belief that the new helmets would protect them. A. A change in policy (i.e., the helmets) led to more risky behavior after the new policy was introduced. B. Football players are usually "risk seeking" individuals by nature. C. There was no conceivable way for the engineers to (scientifically) demonstrate that the new helmets were safer than the old ones. D. All of the above