How might the implementation of price controls have a negative effect?
a. by strengthening the market’s information-transmission system too much
b. by closely aligning the economic decisions of households and firms
c. by depriving the market price of its meaning for buyers and sellers
d. by enforcing the equitable distribution of scarce resources.
c. by depriving the market price of its meaning for buyers and sellers
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Not including transactions from the underground economy will tend to ________ GDP, and not including environmental changes caused by pollution will tend to ________ GDP
A) undervalue; undervalue B) overvalue; overvalue C) overvalue; undervalue D) undervalue; overvalue
The costs in time and effort incurred by people and firms who are trying to minimize their holdings of cash because of inflation are called
A) menu costs. B) shoe leather costs. C) transactions costs. D) imperfect competition costs.
Although a LoJack benefits the community as a whole by lowering the incidence of theft, an individual car owner may prefer not to install it
Indicate whether the statement is true or false
Other things equal, contractionary fiscal policy will lead to:
a. an increased budget deficit (assuming an initial budget deficit). b. a reduced budget surplus (assuming an initial budget surplus). c. an expanded budget surplus (assuming an initial budget surplus). d. increased government purchases.