Alex is playing his music at full volume in his dorm room. The other people living on his floor are enjoying his music, but Alex does not know or care. Alex's music playing is an example of a:
A. Pareto externality.
B. negative externality.
C. normative externality.
D. positive externality.
Answer: D
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A) it is incurred without any opportunity cost. B) it increases wealth. C) the value of the inputs exactly equals the value of the output. D) it creates a new material object. E) all of the above are true.
One of the biggest benefits of the Internet auction site eBay
A) is its control over prices. B) is that it increases the supply of products. C) is that it increases the demand for products. D) is that it reduces transaction costs for both sellers and buyers.
If the value of the spending multiplier is greater than 1, then an increase in investment will shift the aggregate demand curve to the left
a. True b. False Indicate whether the statement is true or false
Both the multiplier effect and the investment accelerator tend to make the aggregate-demand curve shift further than it does due to an initial increase in government expenditures
a. True b. False Indicate whether the statement is true or false