A benevolent social planner would prefer that the output of good x be decreased from its current level if, at the current level of output of good x,
a. social value = private value = private cost < social cost.
b. private cost < social cost = private value = social value.
c. social cost = private cost = private value < social value.
d. social cost = private cost = private value = social value.
a
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The expenditure multiplier explains how a change in
A) real GDP leads to a change in autonomous expenditure. B) autonomous expenditure leads to a change in real GDP. C) real GDP leads to a change in induced expenditure. D) induced expenditure leads to a change in autonomous expenditure. E) induced expenditure leads to a change in real GDP.
Which of the following correctly identifies a characteristic of structural equations?
A. A structural equation should contain equal number of dependent and independent variables. B. A structural equation should contain equal number of endogenous and exogenous variables. C. A structural equation should have a behavioral, ceteris paribus interpretation on its own. D. A structural equation should not contain structural errors.