Which of the following is an activity of government that is not an activity of private firms?
A. Enforcing involuntary transactions.
B. Paying equitable wages.
C. Creating positive externalities.
D. Pursuing economic efficiency.
Answer: A
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Describe the major features of the business cycle. Be sure to discuss what variables are affected by the cycle, a description of the key features that are apparent in the data, how variables are related to one another, how regular the cycle is, and
how predictable the cycle is.
According to the IS equation, a change in which of the following will cause a change in output?
A) real interest rate B) autonomous investment C) marginal propensity to consume D) all of the above E) none of the above
An oligopolist will increase production if the output effect is
a. less than the price effect. b. equal to the price effect. c. greater than the price effect. d. The oligopolist never has an incentive to increase production.
Foziah is a policy maker who is very concerned about inflation. Should she support a law that will index federal workers’ pay to the inflation rate? Explain why or why not.
What will be an ideal response?