A private good is non-excludable and rival in consumption
a. True
b. False
Indicate whether the statement is true or false
False
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Which of the monetary policy tools can alter both the level of excess reserves and the money multiplier?
A. The reserve requirement B. The discount rate C. Open-market operations D. The federal funds rate
Which of the following could contribute to a rise in GDP yet may not be economically beneficial?
a. building schools b. water treatment plant construction c. tobacco sales d. airport construction