Which of the following is an example of government failure?
A. Merit goods.
B. Too much regulation resulting in wasted resources.
C. Public goods.
D. Externalities.
Answer: B
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Comparative advantage is based on
A. capital costs. B. labor costs. C. dollar price. D. opportunity costs.
Changes in consumption and investment spending due to changes in the real interest rate alter:
A. money demand. B. autonomous expenditures. C. induced expenditures. D. the money supply.
In the Keynesian-cross model, if the MPC equals 0.75, then a $1 billion decrease in taxes increases planned expenditures by ______ and increases the equilibrium level of income by ______.
Fill in the blank(s) with the appropriate word(s).
The threat of rejection in market transactions:
A. leads to higher prices as sellers try to cover possible losses. B. leads to better products and lower prices for consumers. C. leads to less cooperation between buyers and sellers. D. does all of these.