Public goods are desired because
A. we want the government to spend our tax dollars.
B. people want and value them but the private sector will not make them available.
C. they came in small units.
D. they make supply equal to demand for private goods.
Answer: B
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When the interest rate in the economy was 10%, the price of a bond with no expiration date that pays a fixed annual interest of $500 was $5,000. If the interest rate in the economy falls to 6%, the price of this bond will be about
A. $7,128. B. $4,700. C. $8,333. D. $5,030.
The national debt is the amount
A) by which government outlays exceed tax revenue in a given year. B) by which government tax revenue exceed outlays in a given year. C) of government outlays summed over time. D) of debt outstanding that arises from past budget deficits. E) of all future entitlement spending.
The government purchases multiplier will be larger if the marginal income tax rate decreases
Indicate whether the statement is true or false
A breakdown of financial markets can result in
A) financial stability. B) rapid economic growth. C) political instability. D) stable prices.