The market system does not produce public goods because:
A. there is no need or demand for such goods.
B. private firms cannot stop consumers who are unwilling to pay for such goods from
benefiting from them.
C. public enterprises can produce such goods at lower cost than can private enterprises.
D. their production seriously distorts the distribution of income.
Answer: B
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Everything else held constant, a depreciation of the domestic currency will cause the IS curve to shift to the ________ and aggregate demand will ________
A) right; increase B) right; decrease C) left; increase D) left; decrease
At the beginning of the financial crisis, banks were hurt by all of the following EXCEPT
A) declines in the value of mortgage-backed securities. B) defaults on mortgages by those with subprime mortgages. C) holding too many Treasury bonds. D) not being repaid on loans to real estate developers.
Which part of the average total cost (ATC) curve is described in the following scenario? To keep up with an increase in sales, a bread factory has added workers and equipment. The factory is teeming with employees, equipment breaks down, injuries occur, and tools are misplaced.
a. High ATC at low output.
b. Low ATC at high output.
c. High ATC at high output.
d. Low ATC at low output.
Why were there so few strikes from 1942-1945?
A. Unions were too weak to strike. B. Union members were afraid that their employers would move their factories to other countries. C. It was considered unpatriotic to strike while we were at full-scale war. D. Labor leaders were afraid that strikes would force financially weak employers out of business.