Consider the following characteristics:
a. low transactions costs
b. small levels of pollution
c. high levels of pollution
d. clear assignment of property rights
Which of the above are assumptions behind the Coase Theorem?
A) a, b, and d B) a, c, and d C) a and d D) a only
C
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An upward shift in the consumption function, other things being equal, could be caused by households:
a. becoming optimistic about the state of the economy. b. becoming pessimistic about the state of the economy. c. expecting future income and wealth to decline. d. None of these.
The larger the MPC: a. the smaller the multiplier
b. the smaller the effect of a given increase in government purchases on consumption purchases. c. the larger the effect of business taxes which reduce investment on aggregate demand. d. the less powerful changes in individual taxes will be in changing aggregate demand.