According to Thomas Sargent and other new classical economists,
a. a credible policy to provide low stable money growth can exist with a fiscal policy that generates large deficits.
b. a credible policy to provide low stable money growth cannot coexist with a fiscal policy that generates large deficits.
c. there is no need for a credible, noninflationary monetary policy to control the government budgetary deficit.
d. None of the above
B
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The demand for a good is more price inelastic if
A) its price is higher. B) the percentage of income spent on it is larger. C) it is a luxury good. D) it has no close substitutes.
Because of the free rider problem
a. private solutions to externality problems are often needed b. side payments are needed in order to achieve Pareto improvements c. governmental solutions to externality problems are often needed d. side payments are needed in order to solve externality problems e. private solutions to externality problems are common