If you concluded from the fact that the last three recessions have occurred while Republicans were President that their fiscal policies create recessions then you would be
A. wrong and have fallen victim to the fallacy of composition.
B. wrong because Democrats are much worse.
C. wrong because causation and correlation are not the same.
D. right.
Answer: C
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Firms should use a resource up to a point where MRP = P.
Answer the following statement true (T) or false (F)
To internalize a negative externality: a. a producer's costs could be reduced by an amount equal to the external cost resulting from the production of a good. b. a producer's costs could be increased by an amount equal to the external cost resulting from the production of a good. c. a producer could receive a subsidy equal to the external cost resulting from the production of a good
d. None of the above are correct.
In the classical model
A. changes in aggregate demand affect only the price level, not real GDP. B. a decrease in aggregate demand will lead to a decrease in the price level and a decrease in real GDP. C. a decrease in aggregate demand will lead to an increase in the price level and a decrease in real GDP. D. changes in aggregate supply leave real GDP unchanged.
Refer to the above figure. Which of the above panels represents complete income equality?
A. Panel A B. Panel B C. Panel C D. Panel D