Expansionary fiscal policy consists of:
a. increased government purchases and increased taxes.
b. decreased government purchases and decreased taxes.
c. decreased government purchases and increased taxes.
d. increased government purchases and decreased taxes.
d
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Property rights are useful in predicting behavior when we define ownership of a resource as
A) a moral claim to a particular resource. B) legal title to the resource. C) physical possession of the resource. D) the ability to appropriate the benefits from use of a resource.
Which of the following explains most clearly why business owners have a strong incentive to strive for operational efficiency?
a. They recognize that operational efficiency promotes the public interest. b. As residual claimants, owners will receive a higher income from increased efficiency. c. The owners will be able to keep production costs low by providing free managerial services to the firm. d. The owners will be able to gain by paying employees below market wages, which will improve the overall efficiency of the economy.