The market mechanism may best be defined as
A. Price regulation by government.
B. The use of market prices and sales to signal desired output.
C. The use of market signals and government directives to select economic outcomes.
D. The process by which the production possibilities curve shifts inward.
Answer: B
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Answer the following statements true (T) or false (F)
1. The poverty rate for female householders without a husband present exceeds the poverty rate for blacks and Hispanics. 2. The biggest disincentive to employment for those on welfare is the effect of taxes as they earn income. 3. For many welfare recipients, taking a job reduces income. 4. As incomes rise, transfer benefits to the poor decrease. 5. A minimum wage rate job raises a family out of poverty.
Suppose an economy of five people has a national income of $100,000 . and each individual earns $20,000 . The Gini coefficient for this economy is
a. one b. zero c. between 1.0 and 0.5 d. between 0 and 0.5 e. not enough information is given
In a perfectly competitive market, the horizontal sum of all the individual firms' supply curves is
a. zero. b. equal to the industry profits. c. the market supply curve. d. a horizontal line.
Consider an initial IS-LM equilibrium with normally-sloped curves. An increase in government spending takes us to a new equilibrium with ________ income and ________ interest rate
A) higher, a higher B) higher, a lower C) an unchanged, a higher D) an unchanged, a lower E) lower, an unchanged