Private entrepreneurs are likely to make better investment decisions than central planners because
What will be an ideal response?
investors who make mistakes must bear the costs of these mistakes personally.
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Under conditions of perfect competition, if a profitable firm pushes its output beyond the point where MR equals MC,
a. profits increase. b. profits diminish. c. AFC increases. d. AVC decreases.
When the Fed wants to raise interest rates after banks have accumulated large amounts of excess reserves, it would
A) increase the interest rate paid on excess reserves. B) increase discount rate. C) increase the required reserve ratio. D) conduct massive open market purchase.
Between 1965 and 1972, eight major pieces of consumer-protection legislation were enacted. This burst of legislative activity was largely driven by
a. increased public fears following the thalidomide tragedy. b. public outcry following a series of steamboat explosions. c. a general lack of faith in the market. d. widespread support for the "Reagan Revolution.".
The island nation of Sonorez produces 200 tons of wheat and 500 tons of corn. Munisia, its neighboring country, produces 400 tons of wheat and corn each. Sonorez would like to consume another 80 tons of wheat and is willing to give up a 100 tons of corn for it. Munisia on the other hand would like an extra 50 tons of corn and is willing to give up 100 tons of wheat. Which of the following
conclusions can be drawn from this? a. The 2 countries will not trade because they will not come to a common bargain. b. Sonorez will trade 100 tons of wheat for extra corn. c. Munisia will trade 100 tons of corn for extra wheat. d. Sonorez will trade 50 - 100 tons of corn with Munisia for 80 - 100 tons of wheat.