Economics indicates that government funding of special interest projects and favoritism of some business firms relative to others will lead to
a. efficient allocation of resources because the government action will correct the failures of the market.
b. the funding of productive projects that will improve the well-being of most citizens.
c. economic inefficiency because the funding will be driven by political rather than economic considerations.
d. a decline in political contributions and a reduction in the quality of the candidates willing to run for political office.
C
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Why must long-run equilibrium in monopolistic competition occur at the point at which the demand curve is tangent to the average total cost curve?
What will be an ideal response?
A change in the discount rate is likely to occur
A) after a change in the Treasury bill rate. B) after a change in the Treasury bond rate. C) before a change in the federal funds rate. D) before a change in the inflation rate.
When the Fed increases the money supply, interest rates
a. rise, causing velocity to fall. b. fall, causing velocity to fall. c. rise, causing velocity to rise. d. fall, causing velocity to rise.
It is rational for someone who wants to sell a lemon to offer the buyer a money-back guarantee.
Answer the following statement true (T) or false (F)