One characteristic of a public good is that it
A) is available for consumption by only a few individuals at any particular time.
B) always eliminates the free-rider problem.
C) can be consumed simultaneously by many individuals.
D) can be easily subdivided into small units.
C
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Use the following graphs to answer the next question.
In the graphs, the numbers in parentheses near the AD1, AD2, and AD3 labels indicate the level of investment spending associated with each curve. All figures are in billions. The economy is at point Y on the investment demand curve. Given these conditions, what policy should the Fed pursue to achieve a noninflationary, full-employment level of real GDP?
A. Increase aggregate demand from AD3 to AD2. B. Increase interest rates from 4% to 8%. C. Decrease the money supply from $225 billion to $150 billion. D. Make no change in monetary policy.
The basket of goods measured in computing the CPI includes goods produced in prior years and imported goods
Indicate whether the statement is true or false
The "Great Society" initiative led to the creation of
a. Medicare. b. Rent subsidies for the poor. c. the Department of Transportation. d. the Department of Housing and Urban Development. e. All of the above.
Crowding out refers to the situation in which:
a. borrowing by the federal government raises interest rates and causes firms to invest less. b. foreigners sell their bonds and purchase U.S. goods and services. c. borrowing by the federal government causes state and local governments to lower their taxes. d. increased federal taxes to balance the budget causes interest rates to increase and consumer credit decreases.