Author Question: Which of these statements is not true of both external cost and external benefit situations? a. ... (Read 31 times)

pane00 · **on:** Jun 30, 2018

Which of these statements is not true of both external cost and external benefit situations?
a. They both can lead to market failure.
b. They both cause welfare costs.
c. They both make it possible for government intervention to lead to more efficient results.
d. All of the above are true.

Question 2

According to the rational expectation view, does the government have the ability to control the level of real output and unemployment?
a. Only in the SR and only if it makes unexpected changes in aggregate demand.
b. Only in the SR and only if it announces plans well in advance, so that expectations are affected.
c. Only in the LR and only if it shifts AS instead of AD.
d. Only in the LR and only if it uses monetary policy instead of fiscal policy.