According to supply-side economics, the government needs to focus on policies to
A. decrease demand.
B. decrease supply.
C. stimulate supply.
D. stimulate demand.
Answer: C
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Which of the following would lead you to predict an upward shift in the consumption function?
a. a decrease in the value of real wealth b. a decrease in disposable income c. an increase in the value of real wealth d. an increase in the price level
When per capita real GDP is increasing, real output is growing
a. more rapidly than prices. b. more rapidly than population. c. less rapidly than prices. d. less rapidly than population.
The distribution of surplus gained from private parties solving an externality problem on their own, as described by the Coase theorem, is dependent on:
A. which party has more negotiating power or wealth. B. who has more power to see to enforcement. C. where the initial rights of the parties lie. D. None of these statements is true.
If the opportunity cost of manufacturing machinery is lower in the United States than in Britain and the opportunity cost of manufacturing sweaters is higher in the United States than in Britain, then the United States will:
A) export both sweaters and machinery to Britain. B) import both sweaters and machinery from Britain. C) export sweaters to Britain and import machinery from Britain. D) import sweaters from Britain and export machinery to Britain.