According to the textbook, what are the two key political functions of government in a market economy?
What will be an ideal response?
The two functions of government that are political rather than economic include (1 ) the regulation and provision of government-sponsored and government-inhibited goods, and (2 ) income redistribution.
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School districts in which relatively more parents choose to not have their children immunized:
A. have higher rates of the diseases for which immunization is normally required. B. are in violation of federal health care regulations. C. have lower rates of the diseases for which immunization is normally required. D. tend to be in poorer neighborhoods.
Suppose that two clothing manufacturers, Frederick's Fashions and Stephan's Styles, announce that they plan to merge. The Herfindahl-Hirschman index is currently 1,500. After the merger, the HHI will rise to 1,560. This market is
A) highly concentrated and so the government will definitely challenge the merger. B) moderately concentrated and because the merger increases the HHI by more than 50 points, the government will definitely challenge the merger. C) moderately concentrated, but because the merger increases the HHI by less than 100 points, the government will probably not challenge the merger. D) competitive and so the government will not challenge the merger.
The market demand function for wheat is Qd = 10 - 2P and the market supply function is Qs = 4P - 2, both measured in billions of bushels per year. Suppose the government wants to increase the price of wheat to $3/bushel and they impose a price support program to achieve their goal. How much wheat must the government buy?
A. 10 billion bushels per year B. 4 billion bushels per year C. 6 billion bushels per year D. None
When the Fed buys government bonds, bank reserves fall.
a. true b. false