The information-aggregation problem faced by the top layers of government can make it hard for the high-level officials to:
A. Discern the prices of specific goods and services in the economy
B. Comprehensively assess the marginal costs and benefits of specific programs
C. Monitor the incomes of individual firms and households
D. Estimate the total amount of spending incurred by the government
B. Comprehensively assess the marginal costs and benefits of specific programs
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A permanent reduction in net exports leads to
A) a less than proportional decrease in real Gross Domestic Product (GDP). B) a more than proportional decrease in real Gross Domestic Product (GDP). C) a reduction in taxes, autonomous government spending, and a fall in real Gross Domestic Product (GDP). D) a proportional increase in real Gross Domestic Product (GDP).
All else held constant, as the variance of a payoff increases, the
A) expected value of the payoff increases. B) risk of the payoff increases. C) expected value of the payoff decreases. D) risk of the payoff decreases.