If government decides not to charge for access to a highly demanded highway, which of the following is most likely to happen?
a. Government will keep capacity the same.
b. Government increase capacity to reduce congestion.
c. Government will encourage telecommuting.
d. Government will produce an inefficient level of highways to maximize social welfare.
b
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The prevailing budget philosophy prior to Keynes called for a balanced budget. Keynes argued that the government should not balance its budget but instead have budget deficits during
a. economic booms. b. during periods of peace but surpluses during periods of war. c. periods of inflation. d. economic recessions.
The public policies designed to mitigate the effects of monopolies are:
A. highly debated issues. B. proven to increase benefits more than increase costs. C. highly effective. D. well-defined and accepted.
Demand-side inflation is usually accompanied by increasing real GDP, while supply-side inflation is usually accompanied by falling real GDP.
Answer the following statement true (T) or false (F)
For an international capital-flow shock in which foreign investors lose confidence in a country
A. the country's real domestic product is affected if the country has a floating exchange rate but not affected if the country has a fixed exchange rate. B. the country's real gross domestic product (GDP) decreases regardless of whether the country has a fixed or floating exchange rate, but the country's real GDP declines less if the country has a floating exchange rate. C. the country's real GDP tends to decline if the country has a fixed exchange rate, but the country's real GDP tends to increase if the country has a floating exchange rate. D. the country's real domestic product is affected if the country has a fixed exchange rate but is not affected if the country has a floating exchange rate.