If the budget allocation for a government agency depends on the last period's spending alone, agency heads have a clear incentive to
A. spend more money even if it is done inefficiently.
B. spend more money only if it is done efficiently.
C. not increase or decrease spending to keep their budget balanced.
D. spend less money if that is the most efficient decision.
Answer: A
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Economic growth can be represented by
A) a movement down the production possibilities frontier (PPF). B) a movement up the production possibilities frontier (PPF). C) an inward shift of the production possibilities frontier (PPF). D) an outward shift of the production possibilities frontier (PPF).
The inflation that occurred during the Civil War (1861–1865) can be described as all of the following except
(a) A means of expropriating resources to fight the war (b) A form of taxation to provide resources to fight the war (c) A representation of a decrease in the purchasing power of money (d) A less expensive way of paying for the war than taxation
If land and capital are complementary resources and the price of land goes down, the employment of capital ______.
Fill in the blank(s) with the appropriate word(s).
The duopolists' dilemma refers to the situation in which:
A. duopolists would be better off maintaining high prices but face an incentive to choose a low price. B. duopolists can only earn high profits by breaking the law. C. duopolists who are engaged in price fixing have an incentive to report the behavior to the government. D. duopolists do not have a dominant strategy.