"Government failure" exists when political decision-makers choose actions that
a. seek efficient outcomes rather than fair outcomes.
b. seek fair outcomes rather than efficient outcomes.
c. conflict with efficient allocation of resources.
d. conflict with the outcome favored by the majority of voters.
C
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Which of the following describes a positive externality?
A) The government imposes a tax on cigarettes in order to discourage smoking among teenagers. B) People who do not attend college still benefit from others who receive a college education. C) John Henry paints the outside of his house in order to increase its market value just before he puts the house up for sale. D) Mary volunteers to drive her neighbor's children to soccer practice.
GDP does not directly include:
a. the value of final goods and services produced, but not sold, during a period. b. the value of services rendered during a period c. the value of intermediate goods sold during a period. d. any of the above.
Most economists agree that the economy will adjust to a recessionary gap, but the adjustment process
a. is rapid and destabilizing. b. is moderately quick, but not as rapid as necessary. c. takes place solely on the supply side. d. is very slow.
In a recession, demand for cars falls, and the demand curve in the market for cars
A. shifts to the right. B. shifts to the left. C. remains unchanged. D. slows down.