For activities in which the benefits are concentrated and the costs widespread, governments are likely to undertake
What will be an ideal response?
too much of these activities relative to what would be efficient.
You might also like to view...
When Jeneva went to Costa Rica in July 2008, a U.S. dollar was worth 550 colones. If today a U.S. dollar is worth 650 colones, it means that the U.S. dollar has depreciated against the colone
Indicate whether the statement is true or false
In a perfectly competitive market, if all firms face identical, constant marginal marginal cost curves, then consumer surplus is
A) the area beneath the market demand curve and above the market clearing price. B) the area above the market demand curve and above the market clearing price. C) the total area beneath the market demand curve. D) definitely zero.
The Monetarist transmission mechanism through which monetary policy affects the price level, real GDP, and employment depends on the:
A. indirect impact of changes on the interest rate. B. indirect impact of changes on profit expectations. C. direct impact of changes in fiscal policy on aggregate demand. D. direct impact of changes in the money supply on aggregate demand.
Keynes believed that for aggregate supply to equal aggregate demand at equilibrium GDP a necessary condition was that total _______ and total _______ must be equal.
Fill in the blank(s) with the appropriate word(s).