When consumers decide that they do not want virtual pets anymore, and this drives all the virtual pet producers out of business, this is a reflection of
a. an outrage
b. not related to issues of freedom
c. consumer sovereignty
d. an inefficient use of resources
e. a circular flow model
C
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Complete crowding out occurs when an increase in government spending is completely offset by an equal increase in tax revenues
Indicate whether the statement is true or false
Economists believe that lower taxes should reduce unemployment because:
A. people have more incentive to be productive if the money they earn is not being taxed as much when taxes are low. B. people have more incentive to find a job, knowing they will keep more of the income they earn from the job when taxes are low. C. people will not want to miss out on the opportunity to keep more of the income they earn when taxes are lower, so they will have an incentive to keep their job and not quit. D. None of these is true.
In the early 2000s, Chinese officials indicted members of a forgery syndicate that sold several hundred diplomas to high school graduates who needed the diplomas to take employment tests. This situation, where having the certificate of knowledge is more important than the knowledge itself, is known as:
A. the brain drain. B. human capital. C. certification. D. credentialism.