We call the situation in which the government makes a problem worse when it attempts to deal with it a(n):
A. government failure.
B. deadweight loss.
C. nudge.
D. incentive compatibility problem.
Answer: A
You might also like to view...
In 1986, an Apple IIe computer with 65 kilobytes of memory cost around $1,500. Today, a $1,500 iMac computer (also made by Apple) comes with 8 gigabytes of memory. This illustrates the potential for what kind of bias in CPI calculations?
A) outlet bias B) new product bias C) increase in quality bias D) substitution bias
According to the theory of purchasing power parity, if the inflation rate in England is greater than the inflation rate in Japan,
A) the law of one price has been violated. B) the nominal value of the pound will appreciate against the yen. C) the nominal value of the yen will appreciate against the pound. D) the nominal value of the pound will appreciate against the yen, but only if the two countries are on the gold standard.
The economy moves up a stationary aggregate demand curve when the Fed:
A. increases its target inflation rate, reflected by a downward shift in the Fed's policy reaction function. B. increases real interest rates in response to inflation, but does not change its target inflation rate or the Fed's policy reaction function. C. decreases real interest rates in response to inflation, but does not change its target inflation rate or the Fed's policy reaction function. D. decreases its target inflation rate, reflected by an upward shift in the Fed's policy reaction function.
The marginal revenue product of labor declines as the number of workers increases because
A. firms must lower prices for the final product when they want to sell more units. B. of the law of diminishing marginal product. C. of diseconomies of scale. D. firms hire the most efficient workers first and the least efficient workers last.