If a consumer places a value of $20 on a particular good and if the price of the good is $25, then the
a. consumer has consumer surplus of $5 if he buys the good.
b. consumer does not purchase the good.
c. price of the good will rise due to market forces.
d. market is out of equilibrium.
b
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
The idea that individuals should be taxed in proportion to the marginal benefits that they receive from public goods is called
A) the horizontal-equity principle. B) the ability-to-pay principle. C) the benefits-received principle. D) the vertical-equity principle.
In contrast to the United States, countries like Japan and Germany have
a. higher rates of saving and investment. b. higher rates of saving but lower rates of investment. c. lower rates of saving but higher rates of investment. d. lower rates of saving and investment.
Stagflation refers to a period of staggering economic growth combined with very low inflation rates
Indicate whether the statement is true or false