Answer the following statements true (T) or false (F)
1. The problems of central planning become less complex as an economy grows in size over time.
2. Profits are the primary "success indicator" for firms in a centrally planned economy.
3. Quantitative measures of managerial success, such as production targets or quotas, are highly foolproof and are thus ideal to use in raising economic efficiency.
4. In the circular flow model, households act as buyers in the resource markets.
1. FALSE
2. FALSE
3. FALSE
4. FALSE
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In 1999, both the equilibrium price and equilibrium quantity of widgets increased. Use supply and demand analysis to explain how these changes could have occurred
What will be an ideal response?
The producers of externalities prefer _____ to _____
a. corrective taxation; regulation b. regulation; subsidization c. competition; subsidization d. regulation; corrective taxation
A decrease in disposable income will:
a. shift the consumption function upward b. shift the consumption function downward. c. cause an upward movement along the consumption function. d. cause a downward movement along the consumption function. e. make the consumption function flatter.
If the real interest rate is above zero, we know that the nominal interest rate must be:
A. lower than the inflation rate. B. higher than the inflation rate. C. equal to the inflation rate. D. zero.