Calculate MPC.
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A lender faces a(n) ________ problem if borrowers with a greater chance of defaulting on their loans get loans from the lender.
A. free?rider B. external cost C. moral hazard D. adverse selection
Which of the following contributes to an increase in labor productivity?
A) increased consumption expenditure B) decreased investment C) increased capital stock D) All of the above contribute to an increase in labor productivity.
Good A has a price elasticity of demand of .27, while good B has a price elasticity of demand of 2.9 . To raise the most tax revenue, the government should:
a. place a unit tax on good A. b. place a unit tax on good B. c. raise the price elasticity of demand for good A. d. subsidize the production of good B. e. cut its spending for various social programs.
In reference to industrial policy, networks of interdependent firms, universities, and businesses that focus on production of a specific type of good are called:
A. bundles. B. clusters. C. vertical industries. D. integrated industries.