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Units 9 and 11

Market failures and

QuestionAnswer
The discretionary fiscal policy can be a: 1- Expansionary policy. 2- Contractionary policy. 3- Increasing policy. 4- 1 and 2 are corrects. 5- 3 and 4 are corrects.
An increase in income taxes: 1- Reduces disposable personal income and thus reduces consumption. 2- Increase disposable personal income and thus reduces consumption. 3- 1 and 2 depending on the type of tax.
What of these options can be examples of negative consumption externalities? 1- Heating homes and driving cars by use of fossil fuels that pollute the atmosphere. 2- Partying with loud music until the early hours of the morning, and disturbing the neighbours. 3- Trying to conservate the enviroment. 4- 1 and 2 are correct.
What of these options can be examples of positive production externalities? 1- Firms train workers who later switch jobs and work elsewhere; external benefits are created as the new employers and society benefit from the trained workers. 2- Workers don't obtain any benefit of working.
Economic growth is usually expressed as: 1- A percentage change in real GDP (or real GNI) over a specified period of time. 2- A percentage change in real GDP per capita (or real GNI per capita) over a specified period of time. 3- Both of them.
Created by: mariavarela
 

 



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