Macro Econ Discussion Questions Assignment Example | Topics and Well Written Essays - 500 words

Macro Econ Discussion Questions - Assignment Example Airport security is not a public good since it is exclusionary and only individuals within the airport premises enjoy the security. If smoking generates external costs, it should not be outlawed but a sales tax should be introduced to cater for the external costs. Similarly, in the case of cars pollution, toll taxes on roads or unit taxes on fuel can be introduced to cover for the social costs of the pollution. Â  If the total price of the products produced in an economy increase more than proportionately compared to the reduction in the quantity produced, then GDP will increase. This is a price inelastic effect. Farmers would rather store their output than sell it during periods of hyperinflation as they would be speculating and waiting for the prices to hit high points so that they can make more profits. This practice would lead to a deficit in supply, which will lead to rocketing of