Economic and social policy diapositivas

Which is not a goal of economic policy?. Which is not a goal of economic policy?. Economic growth. Full employment. Price stability.

The task of keeping the general price level from increasing or decreasing, is the definition of what?. Economic growth. Full employment. Mortgage increases. Price stability.

Which one is not a function of economic policy?. Allocative. Substantial. Stabilization. Distributive.

Public goods and services are. all goods and services paid for by government. goods and services provided by publicly held companies. goods and services that would not be adequately provided by the market. goods and services that are available to the public.

Establishing and enforcing clearly defined property rights is an example of government. providing a social and legal framework. maintaining competition. providing public goods and services. redistributing income.

Smoke from a factory drops ash all over your car. Government’s economic function in this case is to. stabilize the economy. maintain competition. provide public goods and services. correct a negative externality.

Which of the following statements about the outcome of an economic interaction is correct?. If the allocation is Pareto efficient, then you cannot make anyone better off without making someone else worse off. All participants are happy with what they get if the allocation is Pareto efficient. There cannot be more than one Pareto-efficient outcome.

Which of the following is an example of an individual who is not involved in a transaction but is bearing some cost?. An individual exposed to secondhand smoke. A producer of aluminum. A consumer of aluminum. A smoker.

Consider an individual who decides to pursue higher education. Who might experience positive externalities from this decision?. Members of society who benefit from a more productive community. The student who benefits from increased economic opportunities. The university which benefits from increased tuition and fees. All of the other answers.

A town provides public transportation in the form of 350 bicycles. The bicycles are placed around town and free for anyone to use. However, within four days all of the bicycles are stolen for private use. This is an example of: The free-rider problem. The free-rider problem. Excludability. Non-rivalrous consumption.

A good that is non excludable and rival would belong to which category of goods?. Public goods. Common goods. Private goods. Club goods.

Which of the following are the two characteristics of a private good?. It is excludable and rival. It is non-excludable and non-rival. It is non-excludable and non-rival. It is excludable but non-rival.

Which of the following describes a free rider problem?. Four roommates want to buy a new couch, but can’t afford it. If there were a fifth roommate, they could afford it, but there isn’t. Four roommates want to buy a new couch. They need all four to afford it but if all four split the use of it, none of them will get enough value from the couch to be worth their share of the cost. Four roommates want to buy a couch, but aren’t sure who will get to keep it once they go their separate ways. The cost of having to figure that out ahead of time disincentivizes them from buying the couch. Four roommates want to buy a couch, but each figures that if he or she just lets the other three pay for it, he or she will still be able to use it once it's bought. They don’t buy the couch.

What is the result of the free rider problem?. Public goods are underprovided. Public goods are overprovided. Public goods are arbitrarily priced. People who should pay for public goods get them for free.

Which of the following is NOT a reason for market failure?. Abundance of public goods. Externalities. Environmental concerns. Abuse of monopoly power.

Which of the following is not a component of aggregate demand?. Consumption. Net exports. Interest rates. Investment. Government spending.

Which of the following is a reason for sticky wages?. Fiscal policy. Monetary policy. Aggregate demand. Long-term contracts. All of the above.

According to Keynesian business cycle theory, what should the government do in response to a recession?. Cut government spending. Increase government spending. Increase interest rates. Expand the money supply. A and D. B and D.

What are some problems with Keynesian business cycle theory?. It does not predict stagflation. Falling aggregate demand may be a symptom, not cause, of recession. Wages are only sticky during recessions. B and C. A and B.

According to the Austrian theory of business cycles, how does the central bank distort price signals?. By increasing velocity, the central bank creates the illusion of greater consumer demand for short-term goods. By increasing velocity, the central bank creates the illusion of lower consumer demand for investment goods. By increasing inflation, the central bank causes interest rates to fall, falsely signaling an increase in consumer savings. By increasing inflation, the central bank causes interest rates to rise, falsely signaling a decrease in consumer savings.

According to the Austrian theory of business cycles, how does the boom part of the business cycle lead to the bust?. Malinvestments made in response to distorted price signals fail when met with insufficient consumer demand. The decrease in interest rates caused by distorted price signals creates an excess of consumer demand. Overconfidence caused by the boom leads entrepreneurs to further invest in short-term goods, past the amount required to meet consumer demand. The increased production of short-term goods caused by distorted price signals is met with insufficient consumer demand. a and c only.

What is the Austrian solution to business cycles?. Reduce long-term investments. Tie the central bank down to a stable rate of inflation. Account for distortions in price signals caused by the central bank. Limited government that doesn’t interfere with market price signals. a and c only.

Which of the following is a problem with the Austrian theory of business cycles?. It fails to explain why entrepreneurs don’t account for the distortions in price signals caused by the central bank. It incorrectly predicts that consumption and investment are positively correlated. It fails to explain why failed investments cause so much unemployment. a and c only.

Business cycles typically follow this pattern: expansion, peak, contraction, trough. trough, expansion, contraction, peak. peak, trough, expansion, contraction. contraction, trough, peak, expansion.

An expansion in the business cycle ends when which of the following occurs?. The economy hits a peak and enters into a recession. The economy reaches a cyclical trough. The economy hits a trough and enters into a recession. The economy begins to grow following a trough.

Which of these variables has a negative relationship with GDP growth?. Unemployment. Credit expansion. Business profit. Employment.

What type of policy would a central bank or government engage in to stimulate an economy?. Expansionary. Fiscal. Contractionary. Monetary.

Which of the following is a list of the components of GDP?. Consumption, government expenditure, investment and net exports. Government expenditure, investment, savings, and imports. Government expenditure, consumption, and private sector spending. Investment, private sector spending, consumption and net exports.

What is the main characteristic of the Open Method of Coordinations (OMC) in EU social policy?. It imposes legally binding rules on member states. It promotes cooperation through shared goals and mutual learning. It replaces national social policies with EU-wide regulations. It focuses exclusively on economic policy. It requieres all member states to adopt identical social-policy standards.