From an economic standpoint, government intervention may be justified
A. If the market mechanism fails to achieve the optimal mix of output.
B. Because the government can increase the level of market power of private businesses.
C. Because the government can encourage the production of private goods.
D. When the private sector is larger than public sector.
Answer: A
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If consumption expenditures are $200 billion, total investment is $50 billion, government purchases are $40 billion, exports are $45 billion, imports are $40 billion, aggregate expenditures must be:
A. $275 billion. B. $295 billion. C. $320 billion. D. $395 billion.
When domestic prices rise,
A. people buy fewer imported goods. B. exports rise. C. exports fall. D. business investment rises because interest rates fall.
The above figure shows the cost curves for a competitive firm. If the firm is to earn economic profit, price must exceed
A) $0. B) $5. C) $10. D) $11.
Refer to Figure 19.2. With no budget constraint, a rational consumer will consume
A. 1 apple. B. 0 apples. C. 6 apples. D. an infinite number of apples.