When the market fails to promote the efficient use of resources by producing either more or less than the optimal output level, government involvement can improve outcomes when _____.
a. the market equilibrium does not result in the equal distribution of the output
b. there are externalities in production and/or consumption that are not captured by the parties involved in the transaction
c. firms have undue market power
d. there are barriers to entry that limit competition
e. asymmetric information characterizes the transaction
a. the market equilibrium does not result in the equal distribution of the output
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Before 1980, most U.S. corporations raised funds
A) in U.S. stock and bond markets or in foreign capital markets. B) in U.S. banks or in foreign capital markets. C) in U.S. stock and bond markets or in U.S. banks. D) in U.S. and foreign banks.
Developing countries
a. do not benefit from foreign aid b. do not benefit from private investment c. generate less than half of their annual flow of foreign exchange from exports d. must acquire foreign exchange in order to pay for imports e. need to decrease labor productivity
Economic profit made by a firm is equal to: a. total revenue minus the sum of implicit and explicit costs for the firm. b. total revenue minus implicit cost for the firm
c. total revenue minus explicit cost for the firm. d. marginal revenue minus the explicit cost for the firm.
A contractionary fiscal policy will reduce a government budget deficit or increase a government budget surplus and lower the quantity of bonds the government must sell.
a. true b. false