The economic functions of government differ from the political functions of government in that
A. the economic functions involve things that affect the way exchange is carried out while the political functions include policies that affect income redistribution.
B. the economic functions are carried out by state and local governments, while the political functions are carried out by the federal government.
C. the economic functions are carried out by the federal government, while the political functions are carried out by state and local governments.
D. the economic functions include policies that affect income redistribution, while the political functions involve things that affect the way exchange is carried out.
Answer: A
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Consider two banks: Bank A and Bank B. Suppose the value of liabilities of both the banks is equal. However, Bank A is solvent but Bank B is insolvent. This would imply that:
A) the value of Bank B's assets exceeds the value of Bank B's liabilities. B) the value of Bank A's liabilities exceeds the value of Bank A's assets. C) the value of Bank B's assets exceeds the value of Bank A's assets. D) the value of Bank A's assets exceeds the value of Bank B's assets.
Which of the following is a normative economic statement?
A. The price of milk is too high. B. The current high price of milk is the result of reduced worldwide supply. C. When the price of milk rises, the quantity of milk purchased falls. D. When the price of milk rises, the cost of milk-based products rises.
When a negative externality is present in a market, the government should:
A. intervene if the benefit of doing so exceeds the cost. B. always intervene. C. intervene it if the public supports doing so. D. never intervene.
Based on the figure above, as a result of international trade, producer surplus
A) increases by $150 million. B) decreases by $150 million. C) increases by $90 million. D) decreases by $90 million. E) remains unchanged.