If a firm’s activities generate detrimental externalities, the marginal social cost will be less than the marginal private cost.
Answer the following statement true (T) or false (F)
False
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If the MPC in an economy is 0.75, government could shift the aggregate demand curve leftward by $60 billion by
A. reducing government purchases by $60 billion. B. reducing government purchases by $12 billion. C. increasing taxes by $15 billion. D. increasing taxes by $20 billion.
What is export promotion? Give a few examples of countries that have tried it
What will be an ideal response?
When two goods are substitutes for each other, the cross price elasticity of demand
A) will be negative. B) will be zero. C) may be either positive or negative. D) will be positive.
Insurance works best in situations where there is
a. a high probability of a small loss. b. a low probability of a small loss. c. a high probability of a large loss. d. a low probability of a large loss. e. the level of probability and the size of the loss are irrelevant.