When actual output increases the potential output, _____.
a. more resources become unemployed.
b. prices remain constant
c. prices tend to increase.
d. nominal GDP decreases.
e. resource prices decrease.
c
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Dick has a dog (Spot) that likes to bark at night. Jane, who lives next door to Dick, must be at work every morning by six o'clock. Suppose that there is a noise ordinance that requires Dick to keep his dog quiet
Is there any Coase solution to this problem that does not involve calling the police? Explain.
In the late 1990s, debt-financed government spending decreased in Mexico. Following this decrease, consumption spending increased. Ricardian equivalence would explain this increase in consumption as the result of:
a. people's expectation of higher future taxes required to pay off government debt. b. people's expectation of lower future taxes that induce them to save less. c. automatic stabilization of the economy. d. the crowding out effect. e. an increase in current household disposable income.