The Truman Doctrine

question 98

Multiple Choice

The Truman Doctrine:

• A) advocated a return to isolationism.
• B) was an alliance between the United States and Great Britain.
• C) called for more cordial relations with the Soviet Union.
• D) committed the United States to fighting communism only in Asia.
• E) committed the United States to fighting communism anywhere.

Explain the difference between marginal social benefit (MSB) and marginal social cost (MSC).

Analyze scenarios to determine socially optimal levels of public goods and externalities.

Describe the concept of a Pigouvian subsidy and its application for external benefits.

Understand the implications of technology spillover in relation to positive externalities.

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Definitions:

Price Level

The aggregate average price of goods and services in the economy at present.

Rate of Interest

The interest segment of a loan charged to the borrower, frequently expressed in terms of an annual percentage of the current loan balance.

Savings

The portion of disposable income not spent on consumption of goods and services, set aside for future use or investment.

Investment

The action of allocating resources, usually money, with the expectation of generating an income or profit.