An elected official will:
a. tend to favor policies that wield benefits in the short run and impose costs in the long run
b. tend to favor policies that impose costs in the short run and yield benefits in the long run
c. both of the above
d. neither of the above
Answer: a. tend to favor policies that wield benefits in the short run and impose costs in the long run
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A positive externality is internalized when
A. demand shifts to the right until the socially optimum level of output is obtained. B. demand shifts to the left until the socially optimum level of production is obtained. C. supply shifts to the left until the socially optimum level of production is obtained. D. b and c E. none of the above
The ultimate source of liquidity in a modern industrial economy is the
A) government Treasury. B) central bank. C) capital market. D) liquidity market.
A disadvantage of the corporate form of business organization is
A) double taxation. B) limited access to capital. C) that the corporation can only do business in the state where it was incorporated. D) unlimited liability for shareholders.
While monopoly power can be abused, it can also be used beneficially. What are the major pros and cons of largeness in business?