People who enjoy the benefits of a public good without paying for them are called:
A. spillover parties.
B. external consumers.
C. free riders.
D. antitrust violators.
Answer: C
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According to your authors, the prohibition on alcohol kept the ________ curve relatively stable while the ________ curve became more ________
A) supply; demand; elastic B) supply; demand; inelastic C) demand; supply; elastic D) demand; supply; inelastic
Which of the following is a reason to think that government action may not be valuable to improve market outcomes with asymmetric information?
a. The private market can sometimes deal with information asymmetries using signaling and screening. b. The government rarely has more information than the private parties. c. Government actions have their own imperfections. d. All of the above are correct.
According to the Taylor rule, the Federal Reserve ________ the real interest rate as the output gap increases and ________ the real interest rate as the inflation rate increases.
A. lowers; raises B. raises; raises C. lowers; lowers D. raises; lowers
Inflation leads to bracket creep, which forces taxpayers to pay a larger percentage of their income in taxes, when
(a) Changes in the real purchasing power of their income do not keep pace with inflation. (b) Changes in the real purchasing power of their income keep pace with inflation. (c) Income tax codes change quickly as inflation emerges, impacting real purchasing power. (d) Income tax codes increase without taxpayer knowledge, forcing them to pay higher taxes than anticipated.