Inflation-targeting is a practice in which the central bank is legally required to focus only on keeping:
a. inflation low
b. unemployment low.
c. investment rates high.
d. interest rates high.
a
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Compensation of employees is the largest component of national income
Indicate whether the statement is true or false
Pharmaceutical development provides a good example of rent-seeking behavior, the pursuit of which results in _______.
a. lower economic activity by diverting resource to less-productive uses b. lower prices throughout the economy c. increased economic activity by promoting efficiency d. a more equitable distribution of income and wealth e. greater income and wealth in the private sector
Figure 7-7
In Figure 7-7 at 100 units, AFC equals
a.
10.
b.
100.
c.
180.
d.
1,000.
The basis of the argument favoring government intervention to correct informational and rationality problems is that:
A. entry into certain markets may be restricted so that excess profits cannot be eliminated by the forces of competition. B. if information is not perfect or if one trader is not rational, a trade can result in one party benefiting and the other losing. C. people cannot possibly know how well off they will be as a result of a trade until after the trade has occurred. D. if individuals are free to produce whatever goods they want, when excess profit is being made, more people will enter into the production of that good and consumers will benefit as the price is pushed down.