Reducing a tariff will ________ the domestic production of the good and ________ the total domestic consumption of the good
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
C
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The crowding-out effect implies that a government budget deficit ________ the demand for loanable funds and ________ equilibrium investment
A) increases; decreases B) does not change; does not change C) increases; increases D) decreases; decreases E) decreases; increases
Which of the following statements explains why monopolies weaken the functioning of the invisible hand?
A) A monopoly is a price taker. B) The quantity produced by a monopoly is too low. C) Monopolies face an upward sloping demand curve. D) A monopoly sets the price of its good below marginal costs.
Policies based on normative economic ideas tend to increase economic efficiency and improve equity
Indicate whether the statement is true or false
The payment received by suppliers of entrepreneurial skills is called profit
Indicate whether the statement is true or false