The government's choices regarding the overall level of government purchases and taxes is known as _____
Fill in the blank(s) with correct word
fiscal policy
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A positive externality or spillover benefit (additional social benefit) occurs when
A. the benefits associated with a product exceed those that accrue for consumers. B. firms earn positive economic profits. C. a firm does not bear all of the costs of producing a good or service. D. product differentiation increases the variety of products available to consumers.
If the market price faced by a perfectly competitive firm increases, in the short run how does the firm respond?
What will be an ideal response?
If P = MC for all goods in a free-market economy, then
a. the desire for utility maximization will lead consumers to buy the amount of each good at which MU = MC. b. the desire for profit maximization will lead consumers to buy the amount of each good at which MU = MC. c. the desire for utility maximization will lead consumers to buy only those goods that have low opportunity costs. d. the desire for profit maximization will lead all firms to stop producing in the long run (though possibly not in the short run).
Global budgets coupled with price ceilings can control total spending as long as:
a. patients are required to pay some of the expenses out-of-pocket. b. Global budgets can never work to control spending. c. providers cooperate by only providing "medically necessary" services. d. the price ceilings are negotiated in good faith. e. utilization of services does not increase significantly.