In the simple Keynesian model, if output exceeds aggregate expenditures,
a. there will be no response from businesses.
b. inventories will decrease and businesses will increase output.
c. inventories will increase and businesses will increase output.
d. inventories will increase and businesses will decrease output.
d. inventories will increase and businesses will decrease output.
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When does the burden of a tax imposed on a good fall more heavily on sellers?
What will be an ideal response?
When people make decisions about the quantity of education to undertake, they balance the marginal social benefit against the marginal private cost
Indicate whether the statement is true or false
In the Keynesian model in the short run, a decrease in government purchases causes output to ________ and the real interest rate to ________
A) fall; rise B) fall; fall C) rise; rise D) rise; fall
An example of a negative externality is the:
A. cost you bear when your neighbor has a noisy party and does not compensate you for your discomfort. B. decrease in income to farmers that results from a drought. C. benefit you receive without paying when your neighbor installs a smoke detector. D. decrease in your real income that results when photographic equipment you purchase increases in price because of increased demand by others for these items.