Explain how the volunteer's dilemma is a special case of the public goods problem in which the possibility exists that no one will end up providing the public good
What will be an ideal response?
The Volunteer's dilemma is a situation in which a single person can provide a public good. Because everyone benefits when the good is provided, and therefore property rights are not well defined, individuals face tension between their desire to see the good provided and and their desire to have someone else provide the good. This tension and the strategic behavior it causes create the possibility that no one will provide the good.
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In the aggregate expenditure (AE) model, the economy is driven to its equilibrium by changes in
A) autonomous expenditures that are the result of changes in real GDP. B) investment that are the result of changes in real GDP. C) induced expenditures that are the result of changes in real GDP. D) net taxes that are the result of changes in real GDP. E) government expenditures on goods and services that are the result of changes in real GDP.
A recession begins with a(n) ________ in spending by firms on capital goods and a(n) ________ in spending on durable goods by households
A) decrease; increase B) increase; increase C) decrease; decrease D) increase; decrease