According to the Application, Hazlitt's argument that the broken window is NOT good for society
A) works in both the Keynesian and classical worlds regardless of where the economy is operating relative to full employment.
B) works in the Keynesian world when the economy is operating below full employment.
C) works in the classical world when the economy is operating at full employment.
D) never works in the Keynesian or classical worlds regardless of where the economy is operating relative to full employment.
C
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When the government contributes to a public good, private contributions will fall.
Answer the following statement true (T) or false (F)
For the federal deficit to be lowered,
A) the federal government must decrease its spending and increase net exports. B) the federal government's expenditures must be lower than its tax revenue. C) the Federal Reserve must reduce the money supply. D) the Federal Reserve must raise interest rates and lower the required reserve ratio.
Gains from trade are the:
A. increase in welfare in both countries that results from specialization and trade. B. transfer of surplus by the receiving country that results from trade. C. deadweight loss by the losing country that results from trade. D. increased skills and human capital that results from specialization and trade.
The term ______ describes a situation where a ______ causes a reduction in the buying power of income, even though actual income has not changed.
a. intertemporal budget; lower price b. income effect; higher price c. intertemporal budget; higher price d. substitution effect; lower price