The belief that the government can do absolutely nothing in either the short run or the long run to reduce the unemployment rate, because people will anticipate the government's actions and respond to it, is held by the
a. rational expectations school
b. neo-Keynesian school
c. classical school
d. supply-side school
e. Keynesian school
A
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Market failures:
A. can always be corrected through government action. B. lead to a desired allocation of resources. C. are sometimes made worse by government failures. D. can never be corrected through government action.
Answer the following questions true (T) or false (F)
1. In a market with positive externalities, the market equilibrium price will be greater than the efficient equilibrium price. 2. In a market with positive externalities, the market equilibrium quantity will be less than the efficient equilibrium quantity. 3. Vaccinations tend to result in a negative externality.
Firms that face downward-sloping demand curves for their output in the product market are called
A) price takers. B) monopolists. C) price dictators. D) price makers.
There is a government budget surplus if
A) G > T. B) G > TR. C) T - TR > G. D) TR < T.