Which of the following is not generally considered a failing of market economies?
a. Market economies can have severe swings from boom to bust.
b. Market economies tend to underprovide public goods.
c. Market economies tend to promote equity at the expense of efficiency.
d. Market economies can misallocate resources when property rights are ill defined.
c
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
The inability of the Federal Reserve to explain movements in M1 demand has led to
A) less emphasis on money growth as a policy tool. B) the Federal Reserve's targeting V1 growth more closely. C) the Federal Reserve's switching to M2 and M3 targets. D) All of the above.
The government budget constraint implies that
A) government borrowings = government spending+ transfers - taxes and user charges. B) government borrowings = taxes and user charges + government spending - transfers C) government spending = transfers - taxes and user charges - government borrowing. D) government spending = government borrowing - transfers - taxes and user charges
The argument that concentration of market power enhances research and development efforts may be weak because
A. No existing monopoly has a research and development program. B. Monopolies cannot afford basic research. C. A monopoly may have no clear incentive to pursue new research and development. D. No one has attempted to gather any empirical evidence.