To counteract relative price changes, the government would implement:
A. monetary policy.
B. policies that affect the supply and demand for all goods and services.
C. polices that affect the supply and demand for a specific good.
D. fiscal policy.
Answer: C
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Suppose a plaintiff hires a lawyer to represent her in a court case. She agrees to pay the lawyer a wage per hour
She knows precisely what the lawyer should do and how long each activity should take, and she can verify that the lawyer has correctly completed each activity. She can terminate the contract at any time. With this contract, A) the lawyer bears all the risk. B) the risk is shared by the lawyer and the plaintiff. C) production efficiency can be achieved. D) production efficiency is impossible.
If the aggregate supply curve is flat,
a. contractionary fiscal or monetary policy will reduce inflation with little effect on real GDP. b. contractionary fiscal or monetary policy will cause significantly less inflation. c. expansionary fiscal or monetary policy will add significantly to real GDP will little effect on inflation. d. expansionary fiscal or monetary policy will add little to real GDP but will increase inflation significantly.
Which of the following is a key economic function of government?
a. protects and enforces property rights and contracts b. issues passports, visas, and foreign travel advisories c. researches the causes and cures of illness and disease d. awards medals and honors for cultural achievement
In a market economy, what provides potential investors with reliable information about the financial performance of a firm?
A. contracts B. insurance C. patents D. accounting rules