If the government wishes to correct the existence of positive externality, it could
A) grant subsidies to consumers to stimulate demand.
B) impose a tax on the producers to stimulate supply.
C) impose taxes on consumers to stimulate demand.
D) grant subsidies to producers to reduce supply.
A
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Which of the following is an example of a positive incentive? a. You expect to be grounded if your grades slip below a B average
b. You expect to receive a scholarship if your grades remain high. c. Desserts will be unavailable at the cafeteria if you arrive after 7:00 p.m. d. Campus police institute a policy of impounding cars parked in delivery zone spaces.
Showing the government's budget deficit as a percentage of nominal GDP is a simple way to correct for the effects of both inflation and the ability of the economy to handle the deficit.
What will be an ideal response?
Money is:
A. controlled by the supply and demand of goods and services on which our money is spent. B. represented only by the amount of dollars and coins in our economy. C. the set of all assets that are regularly used to directly purchase goods and services. D. anything that we use to buy goods and services as long as it is not a good itself.
The primary factor that caused most economists to lose their faith in the classical approach to macroeconomic policy was
A. the evidence that classical ideas were useful during economic booms, but not during economic recessions. B. the theoretical proof that classical ideas were invalid. C. the presence of both high unemployment and high inflation during the 1970s. D. the high levels of unemployment that occurred during the Great Depression.