According to the Keynesian framework, which of the following will not help a country to get out of a recession, but may help that country reduce inflation?
a. an increase in military spending
b. a decrease in military spending
c. increase in spending by the government on health care
d. decrease in federal government taxation of personal income
b. a decrease in military spending
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Does the presence of asymmetric information necessarily imply that governments should intervene in a market?
What will be an ideal response?
Which of the following will most likely happen when a person's income increases, other things equal?
a. The budget line will shift outward b. The budget line will become steeper c. The budget line will become flatter d. The indifference curves will shift outward e. The indifference curves will shift downward
If the price of inputs rises and personal income taxes rise:
a. Aggregate demand rises and aggregate supply falls. b. Aggregate demand rises, but aggregate supply does not change. c. Aggregate demand falls and aggregate supply rises. d. Aggregate demand rises and aggregate supply rises. e. Aggregate demand falls and aggregate supply falls.
An approach that can be taken by someone directly involved in a transaction to solve the problems caused by information asymmetry is:
A. statistical discrimination. B. proofing. C. mandating that information be shared. D. All of these are ways to solve information asymmetry.