Opponents of government intervention in the economy argue that externalities:
A. do not create problems for the model.
B. may not be effectively corrected by the government.
C. are themselves the inevitable result of government policies.
D. should be corrected with regulations rather than subsidies.
Answer: B
You might also like to view...
Total planned expenditure is composed as
a. planned investment. b. planned government spending and taxes. c. total investment, total consumption, and government spending. d. planned investment, planned government spending, and planned taxes.
In a situation of mutual interdependence and identical products, managers of oligopolistic firms ________ attempt to differentiate their product to earn ________ economic profit.
A) should; positive B) should not; positive C) should; negative D) should; zero
Following the lifting of price controls that had been implemented in the early 1970s, inflation skyrocketed. Economists' explanations for this acceleration in the price level include:
a. the increase in the money supply that also occurred during the early 1970s. b. increases in the federal government deficit, especially in 1971 and 1972. c. supply-side shocks in oil and food. d. the release of inflationary pressures that built up during the period of price controls. e. All of the above.
The income-expenditure multiplier leads to greater than one-for-one changes in output when autonomous spending changes because:
A. autonomous spending supports more output than induced spending. B. multiple deposits are generated when new reserves are produced through fractional reserve banking. C. planned changes in inventories signal producers to adjust the level of output. D. the direct changes in spending change the income of producers which leads to additional changes in spending.