To avoid the free-rider problem, which of the following goods is best provided by the government and paid for with tax dollars?
A. automobiles
B. lighthouses
C. bread
D. windows
Answer: B
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Both presidents Kennedy and Reagan proposed significant cuts in income taxes. Opponents of these tax cut proposals argued that
A) it would be better to cut taxes on corporate profits. B) cutting state sales taxes, rather than federal income taxes, would result in greater economic efficiency. C) while the tax cuts would result in greater economic efficiency, there was too much opposition to the tax cuts in Congress. As it turned out, Congress ultimately approved both tax cut proposals. D) the tax cuts would benefit high-income taxpayers.
The net present value of a project is calculated as
A) the future value of all cash inflows minus the present value of all outflows. B) the sum of all cash inflows minus the sum of all cash outflows. C) the present value of all cash inflows minus the present value of all cash outflows. D) None of the above
Refer to the above figure. Which of the following statements about panel D in the figure is TRUE?
A) The figure represents a long-run equilibrium for a monopolistic competitor. B) The figure represents an industry long-run equilibrium for monopolistic competition. C) The figure is in error since it doesn't show the monopolistic competitor making profits in the long run. D) The figure is in error since it has marginal cost intersecting the ATC curve at a point other than the minimum of ATC.
The money multiplier:
A. Is equal to the required reserve ratio times transactions deposits. B. Gets larger as the required reserve ratio increases. C. Is the reciprocal of the required reserve ratio. D. Represents the lending capacity of an individual bank.