Because people enjoy the benefits of public goods whether they pay for them or not, people are usually ________ to pay for them. This is known as the free-rider problem, and is intrinsic to ________ goods.

The free-rider problem with a public good leads to

A) inefficiency if the good is provided by only private markets with no government action. B) overproduction if the good is provided by private markets. C) underproduction if the good is provided by the government. D) None of the above answers is correct.

Suppose that Congress allocates $5 billion to an "energy-efficient appliance rebate" program. It also raises taxes by $5 billion to keep the deficit from growing. If the marginal propensity to consume is 0.8, what is the effect on equilibrium GD

A) GDP does not change. B) GDP increases by $5 billion. C) GDP increases by $25 billion. D) GDP increases by $4 billion.