The optimal subsidy for private giving to a public good increases as the number of people benefiting from the public good increases.
Answer the following statement true (T) or false (F)
True
Rationale: The optimal subsidy is equal to the sum of the marginal benefits of a dollar of giving for everyone other than the "giver" -- which increases as the number of "others" increases.
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Which of the following transactions represents the purchase of a final good or service?
A) General Motors purchases tires from Goodyear to install on its new Chevy Suburbans. B) Aunt Matilda buys a new convection oven for her condo in Boca Raton. C) Dunkin' Donuts purchases coffee beans. D) Tiffany's buys platinum wire to use in the production of its necklaces.
If the government accelerates money supply growth and enlarges the budget deficit to stimulate aggregate demand, the rational expectations hypothesis indicates that decision makers will
a. ignore the policy until it exerts an observable impact on prices, output, and employment. b. quickly take steps to adjust their decision making in light of the more expansionary policies. c. be fooled at the outset but eventually adjust their decision making in accordance with the change in policy. d. be unaware that this policy change has been implemented until a higher rate of inflation is observed.
Suppose a German bank purchases a U.S. Treasury bond. This transaction would be recorded in the:
A. capital account. B. current account. C. goods trade balance. D. unilateral transfers.
The stock market crash of 1929 led to:
A. the Great Depression. B. the Great Recession. C. Black Thursday. D. the South Seas bubble burst.