If there are significant external benefits associated with the consumption of a product, it can be said that the private benefit to the consumer ____ the relative importance of this product to society and output should ____ to move toward the efficient situation
a. overstates; increase
b. understates; increase
c. overstates; decrease
d. understates; decrease
b
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The Federal Reserve operates under a rule that requires money supply growth to increase by one percentage point for every percentage point that unemployment rises above its natural rate
a. True b. False Indicate whether the statement is true or false
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
What was the main reason the Fed stopped announcing growth targets for money aggregates in the early 2000s?
What will be an ideal response?
How did the Soviet model of communism compare to that of Karl Marx?
A. The models were identical. B. The Soviet model was faithful to the Marxian model, but it had been modified slightly over the years. C. What the Soviets were operating all these years was a classic capitalist model. D. While there was public ownership of the means of production, there did not appear to be a very close resemblance to the Marxian model.