When comparing market and public sector decision making, which statement is NOT true?
A) Self-interest is the motivating force in each decision making arena.
B) In both decision making sectors, majority rule is how things are done.
C) In both decision making sectors, there are scarcity constraints.
D) Collective (political) outcomes and economic outcomes may differ.
Answer: B
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What does GDP measure, and what is the formula for calculating GDP using the expenditures approach?
What will be an ideal response?
Refer to Scenario 2.1. What is the equilibrium price of books?
A) 5 B) 10 C) 15 D) 20 E) none of the above
Which of the following scenarios would be most likely to cause the shift in the demand of loanable funds from D0 to D1, shown in the following diagram?
a) A decrease in investment tax credits. b) A technological advancement that increases productivity. c) A decrease in business taxes. d) The lifting of business regulations.
Exhibit 20-5 Money, investment and product markets
?
In Exhibit 20-5, a shift in aggregate demand from AD2 to AD3:
A. increases real GDP, and lowers the price level. B. decreases real GDP, and lowers the price level. C. increases real GDP, and raises the price level. D. decreases real GDP, and raises the price level.