Economic models omit many details to allow us to see what is truly important

The economic impact of a change in spending, working through the multiplier, takes effect

a. immediately. b. very quickly, with a small number of rounds of spending. c. after a very long period of time. d. after multiple rounds of spending occur.

When production of a good generates external costs, the

a. demand curve for the good will overstate the true social benefits from consumption of the good. b. demand curve for the good will understate the true social benefits from consumption of the good. c. supply curve for the good will overstate the true social cost of producing the good. d. supply curve for the good will understate the true social cost of producing the good.