A perfectly competitive system results in an efficient allocation of resources among firms and an equal distribution of final products among households.
Answer the following statement true (T) or false (F)
False
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The figure shows the relationship between Moira's income and the quantity of macaroni that she demands. When income is less than $350 per month, macaroni ________
A) is an inferior good B) is a normal good C) has many substitutes D) has negative income elasticity
While Schumpeter's view that clusters of innovations can set off an innovation cycle is quite different from the views held by real business cycle theorists, they both
a. believe that cycles are not inevitable but the result of historical accidents b. believe that cycles are inherent and inevitable c. they both focus their analyses on technological change d. view the interaction of the multiplier and accelerator as the key factor prolonging the innovation cycle e. advocate strong countercyclical fiscal policy as a means of creating a more stable growth path for the economy
The multiplier principle indicates that if business decision makers become more optimistic about the future and, as a result, increase their investment expenditures by $82 billion, real GDP
a. will increase by less than $82 billion if the economy was initially operating well below capacity. b. will increase by more than $82 billion if the economy was initially operating well below capacity. c. will increase by more than $82 billion if the economy was initially operating at full-employment capacity. d. will decline if the marginal propensity to consume is less than 1.
In 2001, a prolonged period of deceased investment and production preceded a ______.
a. a depression b. a recession c. an expansion d. a recovery