In a certain city, the local government regulates the destruction of historic buildings and provides tax breaks to owners of historic buildings who restore them. These government policies
a. reflect the fact that restored historic buildings convey a positive externality.
b. reflect the fact that the destruction of historic buildings conveys a positive externality.
c. are likely to worsen the market failure that is associated with historic buildings and the restoration of such buildings.
d. are likely to decrease the well-being of society as a whole.
a
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The government can meet its interest bill without having to levy taxes if it issues more bonds and if the
A) economy's real growth rate of output is greater than the real interest rate. B) economy's real growth rate of output is equal to the nominal interest rate. C) economy's real growth rate of output equals or exceeds its real interest rate. D) economy's nominal growth rate of output equals or exceeds its real interest rate.
Contrast the Keynesian and Monetarist views on how a change in the money supply impacts the economy
The U.S. is able to maintain a large trade deficit because:
A. when the business cycle is in a boom, it will be a trade surplus. B. it is balanced by a large capital surplus. C. it is balanced by a large capital deficit. D. None of these statements is true.
A cut in taxes, combined with an increase in government purchases, would: a. increase AD
b. decrease AD. c. leave AD unchanged. d. have an indeterminate effect on AD.