What does internalizing an externality refer to?
a) making certain government does not disrupt the internal workings of the market
b) making buyers pay the full price for the products they purchase
c) making certain that all market transaction benefits go to only buyers and sellers
d) making buyers and sellers take into account the external effects of their actions
Ans: d) making buyers and sellers take into account the external effects of their actions
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Which one of the following would likely reduce the level of structural unemployment?
A) increasing the minimum wage to encourage more people to work B) limiting unemployment insurance benefits C) strengthening restrictions on who can be licensed to enter certain professions D) increasing the level of union bargaining power
The formula to compute the spending multiplier is:
a. 1 / (MPC + MPS). b. 1 / (1 ? MPC). c. 1 / (1 ? MPS). d. 1 / (C + I).