In the case where the LM schedule is relatively steep and the IS schedule is relatively flat, the most effective policy would be a change in
a. money supply.
b. government expenditures.
c. government spending financed by a change in taxes.
d. taxes.
A
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All of the following are ways that the government can correct for positive externalities EXCEPT
A) by subsidizing the consumption of the good. B) producing the good itself. C) by regulation. D) by assessing an effluent fee.
Saving is
A) the amount one does not consume in a given period of time while savings is the accumulation of past periods of saving. B) the accumulation of past periods of savings while savings is the amount of disposable income that is not consumed in a given period of time. C) the difference between real GDP and disposable income while savings is the difference between disposable income and consumption spending. D) the difference between disposable income and spending on goods and services while savings is the difference between real GDP and disposable income.
Tariffs and other trade restrictions increase the domestic scarcity of products from abroad. Such policies benefit domestic producers of the restricted products at the expense of domestic consumers. This statement: a. is essentially correct
b. contains two errors; trade restraints do not increase the domestic scarcity of product and neither do they harm domestic consumers. c. contains one error; domestic producers gain at the expense of foreign producers rather than domestic consumers. d. contains one error; the trade restraints do not increase the scarcity of foreign produced goods.
Even if employers are not prejudiced, employee or customer discrimination will tend to be reinforced by market forces and may lead to permanent wage differences between the favored and unfavored groups
a. True b. False