Private entrepreneurs are likely to make better investment decisions than central planners because
What will be an ideal response?
investors who make mistakes must bear the costs of these mistakes personally
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The Acme Stereo Company had a capital stock of $24 million at the beginning of the year. At the end of the year, the firm had a capital stock of $20 million. Thus its
A) net investment was some amount but we need more information to determine the amount. B) net investment was $4 million for the year. C) gross investment was zero. D) net investment was -$4 million for the year.
Which of the following would cause the unemployment rate as measured by the Bureau of Labor Statistics to understate the true degree of joblessness in the economy?
A) people employed in the underground economy B) unemployed persons who falsely report themselves as actively looking for a job C) retired people who have no intention of returning to work D) people with part-time jobs who would prefer to be working full time
Under a pure price system, the decision of resource allocation is made by
A) the head of the government. B) a queen or king. C) individuals who own the resources. D) no one.
The long-run aggregate supply curve
a. is vertical b. is upward sloping c. is downward sloping d. is horizontal e. can have a variety of shapes depending on fiscal policy