Unlike a private good, a public good:
A. has no opportunity costs.
B. has benefits available to all, including nonpayers.
C. produces no positive or negative externalities.
D. is characterized by rivalry and excludability.
Answer: B
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To the extent that the political process of moving legislation through Congress is slow
A) the effect time lag will be long. B) the recognition time lag will be long. C) the action time lag will be long. D) automatic stabilizers will not be effective.
Madison, a U.S. citizen, works only in Germany. The value she adds to production in Germany is included
a. in U.S. GDP, but it is not included in German GDP. b. in German GDP, but it is not included in U.S. GDP. c. in both German GDP and U.S. GDP. d. in neither German GDP nor U.S. GDP.
What is the meaning of the term "crowding out"?
a. The exclusion of private investors in the foreign exchange market due to a central bank fixing of the exchange rate. b. A lower consumption level because of high and accelerating inflation. c. A reduction in private borrowing due to the government-induced increase in the real risk-free interest rate. d. None of the above.
If, for an imaginary closed economy, investment amounts to $10,000 and the government is running a $2,500 deficit, then private saving must amount to $12,500
a. True b. False Indicate whether the statement is true or false