In enforcing the legal system, the government in a market capitalist economy acts to:
A) enforce contracts.
B) enforce property rights.
C) discourage fraud.
D) do all of the above.
Ans: D) do all of the above.
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If imports are $100 million less than exports, government expenditures are $500 million, consumer expenditures are $1 billion, and gross investment spending is $500 million, then GDP is
A) $1 billion. B) $1.9 billion. C) $2 billion. D) $2.1 billion.
Licensing is a process in which a firm wanting to enter a market must
a. require all potential customers to obtain government permission to purchase the product. b. notify the government within a certain period after it has entered the market. c. pay all overdue taxes before entering the market. d. obtain permission from the government to enter the market.
Part of the controversy about Fed independence include(s)
A. the goal to bring all macroeconomic policy under the direct control of the president. B. the appropriate role of the Fed in policy making. C. how to make the Fed more powerful than other central banks. D. All of the above are correct.
A monopolistic competitor is in long-run equilibrium when
A. price is greater than marginal cost. B. it is making positive profits or zero profits and price is greater than marginal cost. C. its average total cost curve is tangent to the demand curve at the profit-maximizing rate of output. D. it is making zero profits and price equals marginal cost.