If bargaining is costless, the assignment of property rights for an externality
a. has no impact on the possibility of an efficient outcome and no distributional impact.
b. has no impact on the possibility of an efficient outcome but does have a distributional impact.
c. does have an impact on the possibility of an efficient outcome but has no distributional impact.
d. does have an impact on the possibility of an efficient outcome and does have a distributional impact.
b
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The above table shows Tammy's total utility from videos and CDs. If Tammy has $70 to spend on videos and CDs and if the price of a video is $10 and the price of a CD is $20, then Tammy maximizes her utility by purchasing
A) 3 CDs and 1 video. B) 1 CD and 5 videos. C) 2 CDs and 3 videos. D) none of the above
If the absolute value of the tax multiplier equals 1.6, real GDP is $13 trillion, and potential real GDP is $13.4 trillion, then taxes would need to be cut by ________ to restore the economy to potential real GDP
A) $250 billion B) $400 billion C) $640 billion D) None of the above are correct. Taxes should be increased in this case.
Trace through the Keynesian cause-and-effect sequence. An increase in the money supply will cause the interest rate to
a. fall, boosting investment and shifting the AD curve to the right, leading to an increase in real GDP b. fall, boosting investment and shifting the AD curve to the right, leading to a decrease in real GDP c. rise, cutting investment and shifting the AD curve to the right, leading to an increase in real GDP d. rise, boosting investment and shifting the AD curve to the left, leading to an increase in real GDP e. fall, cutting investment and shifting the AD curve to the left, leading to a decrease in real GDP
A theory is a deliberate simplification or abstraction of factual relationships
a. True b. False Indicate whether the statement is true or false