Selling bonds to finance new government debt leads to an opportunity cost that is
A. Greater than when government debt is financed with taxes.
B. The same as financing government debt with taxes.
C. Less than when government debt is financed with taxes.
D. Dependent on who buys the bonds.
Answer: B
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If the equilibrium price of good X is $4 and a price ceiling is imposed at $5, the result will be a(n):
a. depletion of inventories. b. shortage. c. surplus. d. equilibrium.
Privately formed cartels are legal in many countries, including the United States
a. True b. False Indicate whether the statement is true or false
The private marginal benefit for commodity X is given by 15 - X, where X is the number of units consumed. The private marginal cost of producing X is constant at 10. In the absence of any government intervention, how much X is produced? What is the gain to society involved in moving from the inefficient to the efficient level of production?
What will be an ideal response?
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher