The presence of adverse selection in a market causes:
A. some transactions to fail to take place.
B. a deadweight loss.
C. market failure.
D. All of these statements are true.
D. All of these statements are true.
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In the early 1950s the two new factors that stimulated the United States' economy were ___________ and ____________.
Fill in the blank(s) with the appropriate word(s).
Taxing some citizens to provide welfare grants to other citizens has been called by some "coercive charity." The economist's case for "coercive charity" assumes
A) it is efficient to transfer a dollar from a wealthy person to someone with little income. B) morality cannot be legislated. C) people are basically selfish. D) people who genuinely want the poor to be helped often do not provide any help. E) redistributing income promotes more rapid economic growth.
To close a $100 recessionary gap, with MPC = 0.5, the government can
a. increase its spending by $100 b. decrease its spending by $100 c. increase its spending by $200 d. increase its spending by $200 e. decrease its spending by $50
If the marginal propensity to consume is 0.75 and the desired amount of increase in real GDP is $240 billion, then by how much would government spending have to increase?
a. $240 billion b. $80 billion c. $60 billion d. $30 billion