The greater the magnitude of the external benefits of production,
a. The larger is the deadweight loss from overproduction
b. The greater would be the optimal tax.
c. The less the private market solution would deviate from the socially efficient level of output.
d. All of the above are true.
a
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Which of the following helps determine the growth rate of potential GDP?
I. capital accumulation II. technology advances III. growth in the quantity of money A) I B) I and II C) I and III D) I, II and III
Appleville is a village that specializes in all forms of apple products. Suppose that each winter, when no apples are being produced, the aggregate output falls below the long-run output level. What type of fiscal policy might be most effective to correct this problem?
A) Reducing taxes in order to decrease aggregate demand. B) Increasing government spending in order to increase aggregate demand. C) Decreasing government spending in order to increase aggregate demand. D) Increasing taxes in order to increase aggregate demand.