Lolita wants to purchase a beautiful art deco office building built in the 1920s, tear it down, and construct a rather bland, glass-and-steel office building that will confer $2 million of benefits to society. In its current state, the art deco office building is worth $1.7 million. Lolita goes to the city council with her proposal and tells the council members that the new office building will hold more tenants and therefore increase employment and tax revenues. If the city council agrees to use eminent domain to allow Lolita to proceed with her project, society as a whole will
A) be made poorer since eminent domain is a costly process.
B) be made poorer since the area will be less aesthetically beautiful.
C) be made richer since the project confers benefits that are greater than the current value of the art deco office building.
D) not be affected since the project only encompasses one small parcel of land.
C
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Gross private domestic investment includes
a. purchases of capital goods, all new construction, and purchases of consumer durable goods b. purchases of capital goods, all new construction, and inventory investment c. purchases of capital goods, all new commercial construction, and inventory investment d. purchases of capital goods, all new residential construction, and inventory investment e. purchases of all types of durable goods, all new construction, and inventory investment
If in order to sell its bonds the government raises interest rates on the bonds it offers, financing government spending by public debt, it
a. may end up crowding out private investment and slowing economic growth in the private sector b. may end up crowding out public investment and increasing economic growth in the private sector c. may slow down inflation and maintain economic growth d. makes it cheaper for private industry to finance its own investment e. will convert deficits to surpluses but at the expense of stable prices