All of the following make the use of fiscal policy less attractive EXCEPT
A) expansionary fiscal policy tends to cause inflation and offsets some of the increased consumer spending.
B) that it cannot be effective, unless it is accommodated with expansionary monetary policy.
C) the substantial margin of error in the value of the multiplier.
D) the legislative lag, which is the time it takes for Congress and the President to pass and implement the measure.
E) the crowding out effect, which is the decrease in private spending that occurs due to increased government spending.
B
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Firms rarely offer unlimited warranties on their products, because then their customers would be less careful with upkeep and maintenance. This situation is an example of
a. confiscation of rents. b. a speculative bubble. c. moral hazard. d. the principal-agent problem.
The goal of the World Bank is to
A) sell the government securities of member nations on the open market. B) supervise exchange rate stability. C) help finance economic development. D) supervise the activities of the central banks of member nations.
Explain what happens when nations don't trade. In addition, explain what happens after they decide to trade
What will be an ideal response?
A market is said to be allocatively efficient when the marginal cost of producing each good equals the marginal benefit that consumers derive from that good
a. True b. False