In many countries, education is either wholly provided by the government or is heavily subsidized. How would an economist explain this?
A. Since education has a spillover? benefit, private markets will under provide for it.
B. Education is a pure public good and those who do not pay cannot be excluded from it.
C. Individuals will not purchase education because they do not benefit from it.
D. Since education has a spillover? cost, private markets will over provide for it.
E. The only way to provide education is through a? government-sponsored system.
Answer: A. Since education has a spillover? benefit, private markets will under provide for it.
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Answer the following statement true (T) or false (F)
What do economists mean when they discuss "scarcity"?
What will be an ideal response?
The expenditure approach measures GDP by adding
A) compensation of employees, rental income, corporate profits, net interest, and proprietors' income. B) compensation of employees, rental income, corporate profits, net interest, proprietors' income, subsidies paid by the government, indirect taxes paid, and depreciation. C) compensation of employees, rental income, corporate profits, net interest, proprietors' income, indirect taxes paid, and depreciation and subtracting subsidies paid by the government. D) consumption expenditure, gross private domestic investment, net exports of goods and services, and government expenditure on goods and services.
When the Fed uses contractionary policy,
A) it causes inflation. B) the price level rises higher than it would if the Fed did not pursue policy. C) it does not change the price level. D) the price level rises less than it would if the Fed did not pursue policy.