Government intervention may be appropriate to correct market outcomes because of
A. Externalities.
B. Production possibilities.
C. Private goods.
D. None of the choices are correct.
Answer: A
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The cost to firms of changing prices
A) is called a menu cost. B) is small even when there is rapid inflation. C) does not exist if inflation is perfectly anticipated. D) all of the above
If a U.S. citizen buys a car produced in Germany, this transaction will add to
a. U.S. aggregate demand. b. U.S. aggregate supply. c. German aggregate demand. d. German imports.
Higher unemployment insurance benefits tend to increase unemployment because they
What will be an ideal response?
A situation in which the price charged is less than society's opportunity cost would lead to
A. marginal cost pricing. B. an efficient amount being produced. C. too much being produced. D. too little being produced.