Education confers positive externalities because
a. some education is done outside the market (i.e., in public schools)
b. curricula are regulated by the government, even in private schools
c. an educated person consuming education gains many benefits he or she did not expect when the process started
d. an educated person who has consumed education usually behaves in a way that benefits others
e. education gives benefits to individuals in excess of the costs they pay to get it
D
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Which of the following situations is one in which the Fed will potentially pursue expansionary monetary policy?
A) Potential GDP is forecasted to be higher than equilibrium GDP. B) Potential GDP is forecasted to be lower than equilibrium GDP. C) Aggregate demand is growing too fast to keep the economy at full employment. D) Aggregate demand is growing too slowly and the economy is in danger of producing GDP above full employment.
To speed up the economy, the Fed typically uses __________ monetary policy; and to fight against the high rate of inflation, the Fed typically uses __________ monetary policy.
a. expansionary; expansionary b. expansionary; contractionary c. contractionary; contractionary d. contractionary; expansionary