Policies such as rent control and trade barriers persist
a. because economists are about evenly divided as to the merits of those policies.
b. because almost all economists agree that those policies have no discernible economic effects.
c. because almost all economists agree that those policies are desirable.
d. despite the fact that almost all economists agree that those policies are undesirable.
d
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Along a linear consumption function,
A) the average propensity to consume rises with income, but the marginal propensity to consume falls with an increase in income. B) the marginal propensity to consume rises with an increase in income. C) the average propensity to consume falls with an increase in income. D) both the average propensity to consume and the marginal propensity to consume rise with an increase in income.
Which of the following is NOT likely to occur when a bank fails?
A) Everyone that deposits money in the bank loses all or a portion of their money, unless the country has a functioning deposit insurance system. B) The loss of savings (or the feared loss of savings) causes households to cut back on consumption, which spreads the recessionary effect wider through the country. C) Unaffected banks may stop making loans as they take a cautious approach, slowing or stopping new investment. D) Other banks make too many loans to make up for the loans not made by the failed bank, kicking off a cycle of stimulation and inflation.
Businesses go to credit markets in order to
A) obtain capital. B) obtain financial assets that can be used to buy capital. C) obtain capital so they can earn rents. D) channel their savings into investments.
If economies of scale are relatively unimportant in an industry, the typical firm's long-run average total cost curve will reach a minimum at a level of output that is a ________ fraction of total industry sales. The industry will be ________
A) large; competitive B) large; an oligopoly C) small; competitive D) small; an oligopoly