Free markets can
A. produce goods and services with maximum efficiency.
B. permanently solve unemployment.
C. completely protect the environment.
D. All of these responses are correct.
Answer: A
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The justification for government action based on the argument that everyone agrees to be coerced if everyone else is forced as well is not compatible with the criterion of Pareto superiority
a. True b. False
Imagine that Odyssey National is a brand new bank, and that its required reserve ratio is 10 percent. If it accepts a $1,000 deposit, then Odyssey National can increase the money supply by:
a. $900. b. $910. c. $1,000. d. $9,000. e. $10,000.
Measuring the national income accounts can NOT be helpful in explaining things like:
A. rates of return on a firm's capital. B. economic booms. C. unemployment rates. D. rates of inflation
Under a fixed exchange rate system, if the inflation rate of the United States exceeds the inflation rate of other nations, the:
A. dollar will depreciate. B. dollar will not change. C. United States will develop a trade deficit. D. United States will develop a trade surplus.