Which of the following best summarizes the importance of business failure and the central idea of "creative destruction in a market economy"?
A) When a business fails, the assets and resources from that business become unemployed, resulting in higher government subsidies.
B) Only through frequent business failure will it be possible to avoid income being concentrated into the hands of a few rich entrepreneurs.
C) The new, rival businesses that drive out old competitors tend to be less efficient and less creative than the older established businesses.
D) Business failure allows the assets and resources from that business to move into other areas where they will be more productive.
D) Business failure allows the assets and resources from that business to move into other areas where they will be more productive.
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Evaluate the following statement: "Water is plentiful, therefore it can't be a scarce resource like oil which is not as plentiful."
What will be an ideal response?
Sales taxes are generally progressive.
A. True B. False C. Uncertain
The above figure shows supply and demand curves for apartment units in a large city. If the city government passes a law that establishes $350 per month as the legal maximum rent, producer surplus will be
A) d. B) d + e. C) d + g. D) d + c + g.
The lending facility that allows any bank to borrow reserves from the Fed is called the:
A. discount window. B. reserve window. C. reserve rate. D. borrower of last resort.