Lolita wants to purchase a rather bland-looking shopping center built in the 1970s, tear it down, and construct an architecturally-stimulating office building that will confer $750,000 of benefits to society. In its current state, the shopping center is worth $900,000. Lolita goes to the city council with her proposal and tells the council members that the new office building will beautify the city and increase property-tax revenues. If the city council agrees to use eminent domain to allow Lolita to proceed with her project, society as a whole will
A) be made richer since property-tax revenues will increase.
B) be made richer since the area will be more aesthetically beautiful.
C) be made poorer since the project confers benefits that are lower than the current value of the shopping center.
D) not be affected since the project only encompasses one small parcel of land.
C
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In Figure 4-10 above, expansionary fiscal policy accommodated by the Fed can be pictured as a movement from points
A) A to D. B) A to C. C) D to B. D) B to D. E) A to B.
An example of a market subject to adverse selection would be:
A. the used car market. B. the insurance market. C. the financial market. D. All of these statements are true.
Comparable worth is the principle that:
a. men and women should be paid comparably. b. employees who perform comparable jobs should be paid the same wage. c. the wage rate equals the value of productivity. d. goods and services priced the same have about the same worth.
Austerity measures typically involve:
A. reductions in government spending and tax increases. B. increases in government spending and tax cuts. C. the purchase of assets and equity from troubled financial institutions. D. a return to the gold standard.