(Last Word) Advocates for a structural solution to the Great Recession argued that:
A. government should cut taxes across the board to stimulate demand for goods and services.
B. firms should be allowed to go bankrupt, allowing the economy to correct for resource misallocations.
C. firms in financial distress should be taken over by the government and run for the public good.
D. massive public works projects should be implemented to produce public capital, keep people employed, and help workers maintain job skills.
Answer: B. firms should be allowed to go bankrupt, allowing the economy to correct for resource misallocations.
You might also like to view...
People tend to "dress up" for job interviews, even though their clothes do not make them more productive in their positions. This situation is an example of
a. signaling. b. adverse selection. c. the principal-agent problem. d. moral hazard.
A decrease in the availability of raw materials that increases the price level is called a ________ shock
A) negative demand B) positive demand C) negative supply D) positive supply
Which of the following transactions would be included in this year's GDP for the United States?
a. You buy a rug imported from Mexico. b. You buy stock in an American textile company. c. You purchase a table over the Internet from a North Carolina furniture manufacturer. d. You purchase a table over the Internet from a Mexican manufacturer.
When an American buys a factory in China, the transaction is registered a credit in the U.S. capital account.
Answer the following statement true (T) or false (F)