Define public goods. Give an example of a public good. Explain ...

[meagbuch]

Define public goods. Give an example of a public good. Explain why private firms will not generally produce public goods.
 
  What will be an ideal response?

Question 2

The argument advanced by Milton Friedman for adopting a monetary growth rule is that
 
  A) active monetary policy potentially destabilizes the economy.
  B) a constant rate of growth in the money supply would eliminate the booms and recessions that make up the business cycle.
  C) the growth rate of M1 has been unstable.
  D) the Fed can control the money supply, but not the level of interest rates.

[bitingbit]

Answer to Question 1

Public goods are goods that bestow collective benefits on members of society. Generally, no one can be excluded from enjoying the benefits of public goods. Private firms will not produce public goods because the benefits cannot be restricted to those individuals who pay for the goods.

Answer to Question 2

A

[meagbuch]

Thank you

[bitingbit]

No problemo