Information asymmetries between producers or consumers along with the problems of externalities can:
A. improve free trade.
B. always be solved by alternative dispute resolution (ADR) mechanisms.
C. cause market failure.
D. restrict the use of property rights in a market economy.
Answer: C
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The natural resources used in production are made available in the
A) government market. B) factor market. C) product market. D) goods and services market.
If the banking sector borrows internationally and lends locally, how does this intensify a financial crisis?
What will be an ideal response?
A large open economy increases its desired saving. This causes the world real interest rate to ________ and the country's current account balance to ________
A) fall; fall B) remain unchanged; rise C) fall; rise D) remain unchanged; fall
Noncontrollable expenditures are called "noncontrollable" because
A) they increase at the same rate as the public debt. B) they change without congressional action. C) only the president can approve these entitlement payments. D) the political process determines the size of the payments.