If labor and capital are underemployed, then an increase in government spending:
A. would have no impact on GDP.
B. would increase GDP by exactly the increase in government spending.
C. would increase GDP by more than the increase in government spending.
D. would increase GDP by less than the increase in government spending
Ans: C. would increase GDP by more than the increase in government spending.
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A politician may be considered an entrepreneur in the sense that
a. he is always open to bribery. b. identical personal characteristics are necessary for success in politics and in business. c. the successful politician discovers and offers voters political goods when voter demand is strong for him. d. like the businessman, the politician selfishly attempts to gain at the expense of his customers.
Which of the following is true of America's millionaires?
a. Most millionaires inherited at least half of their wealth. b. Millionaires are far more likely than others to be self-employed entrepreneurs. c. It is virtually impossible to achieve this status by saving and investing over a lengthy period of time. d. Only about 20 percent of the millionaires in the United States have college degrees.
If the interest rate rises, an individual could choose to
a. increase consumption when young. b. increase consumption when old. c. decrease consumption when young. d. Any of the above could be correct.
The market system does not produce public goods because
A. there is no need or demand for such goods. B. public enterprises can produce such goods at lower cost than can private enterprises. C. their production seriously distorts the distribution of income. D. private firms cannot stop consumers who are unwilling to pay for such goods from benefiting from them.