Which of the following describes an external benefit resulting ...

[luminitza]

Which of the following describes an external benefit resulting from an individual's purchase of a winter flu shot?
 a. A flu shot is less expensive than the cost of treatment when you get the flu.
 b. The income of doctors increases when you get a flu shot.
 c. A flu shot reduces the likelihood that others will catch the flu from you.
 d. A flu shot reduces the likelihood that you will miss work as a result of sickness, and, therefore, you will earn more income.

Question 2

With rational expectations, a policy that would increase AD would lead to:
 a. higher inflation and higher real output in the short run.
 b. higher inflation and lower real output in the short run.
 c. higher inflation and an indeterminate effect on real output in the short run, if people's expectations were correct.
  d. higher inflation and no change in real output, if people's expectations were correct in the short-run.

[sylvia]

Answer to Question 1

c

Answer to Question 2

d

[luminitza]

Thank you

[sylvia]

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