Which of the following statements is true?
A) Government purchases is the largest component of GDP.
B) Net exports are equal to exports plus imports.
C) U.S. imports refer to the physical quantity of foreign-produced goods that are purchased by residents of the United States.
D) Government purchases includes the spending on goods and services by all levels of government (federal, state, and local).
E) c and d
D
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Which political philosophy argues that the government should choose policies deemed just, as evaluated by an impartial observer?
In the case of perfectly inelastic demand,
a. the change in quantity demanded equals the change in price.
b. the percentage change in quantity demanded equals the percentage change in price.
c. infinitely-large changes in quantity demanded result from very small changes in the price.
d. quantity demanded stays the same whenever price changes.
The presence of market failures implies that:
A. money is not an effective tool for exchange in a market system. B. there is an active role for government, even in a market system. C. individuals and firms should strive to be self-sufficient rather than specialize. D. command systems are superior to market systems in the allocation of resources.
Perfectly competitive markets are efficient because
A. the long run equilibrium assures that the prices of resources will not increase. B. they always reach equilibrium. C. the cost to society for producing the goods is exactly equal to the value that society places on the good. D. firms in the market are price takers.