In the Fable of the Bees, it was found that contrary to popular belief among economists, but consistent with the Coase Theorem
a. apple growers would pay bee keepers for pollination services.
b. bee keepers would pay orchard owners for access to their flowering trees.
c. apple growers and bee keepers would reimburse each other for increasing output.
d. the transactions costs of negotiating prevented any agreements from being reached between orchard owners and bee keepers.
c. apple growers and bee keepers would reimburse each other for increasing output.
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A scatter diagram could help a policy maker decide on the size of a tax cut necessary to increase consumer expenditures by a certain amount.
Answer the following statement true (T) or false (F)
Suppose policy makers want to increase GDP by $450 billion. If the marginal propensity to consume is 0.9, by how much must taxes decrease to achieve this target?
What will be an ideal response?
The way in which most persons pay their personal income tax is in the form of
a. quarterly payments throughout the year. b. annual payment by April 15. c. monthly payments as part of mortgage payments. d. payroll withholding during the year.
The text points out that there is an inverse relationship between the fiscal cost of a bank crisis and real GDP growth. What are some of the reasons that can explain this inverse relationship?
What will be an ideal response?