Which of the following generates allocative efficiency in a market economy?
A) national government intervention
B) voluntary exchange between buyers and sellers
C) United Nations rules for competition
D) equity
Answer: B
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If the Fed wishes to increase nominal interest rates, it must engage in an open market ________ of bonds that ________ the money supply.
A. sale; does not change B. sale; increases C. sale; decreases D. purchase; increases
Rika's opportunity cost of producing 100 t-shirts is 50 jackets. Jeff's opportunity cost of producing 75 t-shirts is 25 jackets. Who should specialize in jackets?
A) Rika B) Jeff C) neither D) both E) More information is needed about their production possibilities frontiers to determine who should specialize in jackets.
In the figure above, the poorest 40 percent of all households receive what share of income?
A) 10 percent B) 20 percent C) 40 percent D) 60 percent
A model that is an oversimplification for one purpose will likely be an oversimplification for other purposes as well
a. True b. False Indicate whether the statement is true or false