Which of the following best illustrates the use of discretionary fiscal policy?
What will be an ideal response?
Congress passing a bill authorizing $2 billion in additional spending when it receives news of a deepening recession
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The term that is used to refer to a situation in which one party to a transaction has more or better information than the other party is
A) adverse selection. B) asymmetric information. C) moral hazard. D) deceptive trade practices.
The argument that a tariff has to be imposed in order to protect any industry just getting started until it gets large enough to be competitive internationally is the
A) start-up industry argument. B) infant industry argument. C) baby industry argument. D) fledgling industry argument.
The ceteris paribus assumption is important to use when building economic models
Indicate whether the statement is true or false
Using the simple supply and demand model for the information market, show what the full disclosure principle does to the market. Start from an equilibrium point and apply the concept.
What will be an ideal response?