Research indicates that the more independent the central bank,
A) the smaller the budget deficit.
B) the higher the nominal interest rate.
C) the lower the rate of inflation.
D) the larger the time inconsistency problem in making policy.
E) the greater the likelihood of a "war of attrition" over policy.
C
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One way to avoid the free rider problem is
A) through mandates. B) for the government to provide the good or service. C) to use social pressure. D) All of the above.
Concerning auctions, what is the definition of a "common-values setting"?
a. Bids are submitted using open outcries. b. Bids are submitted simultaneously, and the highest is selected as the winner. c. Bidders value the object the same, but are uncertain as to what that value is. d. Bids are submitted by syndicates of cooperating bidders.
Which of the following is true of public goods?
a. They can only be supplied by the government. b. They will tend to be supplied efficiently by the private sector when markets are competitive. c. It is difficult to establish a one-to-one link between payment and receipt of such goods. d. From an efficiency standpoint, private markets will tend to supply an excessively large amount of public goods.
The "new growth theory" of economic growth emphasizes the importance of
A. Household saving as a source of funds for investment. B. Investing in new plants and equipment. C. Investing in ideas. D. Borrowing funds for investment from foreign sources.