Reaching an Efficient Bargain Is Difficult When the

question 491

Multiple Choice

Reaching an efficient bargain is difficult when the

• A)externality is large.
• B)number of interested parties is large.
• C)externality is negative.
• D)government becomes involved.

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Definitions:

Deflation

Opposite of inflation, occurs when prices continue to fall.

Housing And Auto Manufacturing

Industries involved in the construction of residential buildings and the production of automobiles, both critical sectors of the economy.

Restrictive Monetary Policy

Government actions to reduce the money supply to curb rising prices, overexpansion, and concerns about overly rapid economic growth.

Money Supply

The total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.