Government provide public goods such as national defence because:
a) governments are more efficient than private firms at producing public goods
b) people do not value national defence very highly
c) of the potential that private firms will make excess profit
d) of the free-rider problem which results in underproduction by private firms
Answer: d) of the free-rider problem which results in underproduction by private firms
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The labor force includes people who
i. are less than 16 years of age. ii. are in institutions. iii. are actively seeking a job but do not have a job. A) i, ii, and iii B) i only C) iii only D) i and ii E) i and iii
Which of the following is a microeconomic issue?
A) Growth in the U.S. economy slowed. B) Increased federal government expenditures have lowered the unemployment rate. C) The inflation rate fell this year. D) The quantity of wheat grown in the United States increases this year. E) The U.S. government cuts taxes to combat a recession.
Figure 15-2
According to the modern expectational Phillips curve illustrated in , unemployment will temporarily rise above the natural rate of unemployment when
a.
inflation turns out to be lower than what people expected.
b.
inflation turns out to be higher than what people expected.
c.
inflation turns out to be equal to what people expected.
d.
all of the above are true.
The most volatile component of aggregate demand is
A. consumption spending. B. government spending. C. investment spending. D. net exports.