Which of the Following Would Indicate the Beginning of an Expansionary

question 19

Multiple Choice

Which of the following would indicate the beginning of an expansionary phase in an economy?

• A)A minor increase in the number of new firms
• B)A decline in stock market prices
• C)An improvement in consumer confidence
• D)A slowdown in housing construction
• E)A decrease in the number of orders for new equipment

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Definitions:

Optimal Tax

A tax designed to generate government revenue with the minimum economic distortion or welfare loss.

Marginal Social Cost

The total cost to society of producing an additional unit of a good or service, including both the cost to the producer and the cost of any negative externalities associated with production.

Marginal Social Benefit

Marginal social benefit is the additional gain to society as a whole from producing one more unit of a good or service.

Emissions Tax

A tax levied on the emission of pollutants, aimed at reducing the level of harmful emissions released into the environment.