Which of the following is a function of the U.S. federal government?
A) deciding for whom firms should produce goods and services
B) distributing private goods and services
C) providing the legal and social framework for economic activity
D) determining what wages firms will pay their workers.
E) deciding how much to produce of private goods and services
C
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Monetary policy can
A) shift the short-run trade-off between inflation and unemployment if it affects expected inflation. B) shift the long-run trade-off between inflation and unemployment through changes in cyclical unemployment. C) shift both the short-run and long-run trade-offs between inflation and unemployment if changes in policy are credible. D) shift neither the short-run nor long-run Phillips curve trade-offs between inflation and unemployment.
How can the market demand for a product be inelastic but the demand for a particular firm is elastic?
A) There is no advertising. B) There is a sufficiently large number of sellers. C) There is only one or two sellers. D) Buyers do not have complete information.
If a large increase in the wage rate leads to a net increase in the use of capital by a firm, then
A. the substitution effect outweighed the output effect. B. the output effect outweighed the substitution effect. C. the substitution and output effects are equal. D. there is no way to estimate the relative size of the substitution and output effect.
The highest Herfindahl-Hirschman index
A. is in Industry X.
B. is in Industry Y.
C. is in Industry Z.
D. cannot be determined.