Deviations from the perfectly competitive market can lead to
a. inefficiently high production costs.
b. higher prices and smaller outputs.
c. less efficient resource allocation.
d. All of the above are correct.
d
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Describe the difference between social interest theory of regulation and the capture theory of regulation
What will be an ideal response?
Sudden and extensive changes in property rights make social cooperation less effective by
A) encouraging excessively conservative attitudes. B) inducing people to save for the future rather than spending now. C) making planning more difficult. D) reducing the power of government to manage the economy.
In any given year, many people at the tails of the income distribution are only there temporarily _____
a. because of changes in the tax code b. making it difficult to track them for determining progressivity c. thereby overstating the progressive nature of the tax system d. making it important to look at the progressivity of the tax system in terms of lifetime income
Which of the following is not true with regard to the burden of the U.S. national debt?
A. The debt does burden future generations to the extent that it is sold to foreigners. B. Budget deficits are not appropriate for stabilization purposes under any circumstances. C. The debt will reduce the nation’s capital stock if incurred during a fully employed economy. D. The large deficits of the 1980s and early 2000 were particularly worrisome because they were not attributable to recessions.