A. monetary policy is ineffective. B. the government is unable to find willing lenders so it can continue borrowing. C. it can only be solved with a fiscal stimulus of lower taxes and more government spending. D. other countries will be unwilling
to buy goods and services from the nation.
A. differs from the marketplace in that voters and congressional representatives often face
limited and bundled choices.
B. is less prone to failure than is the marketplace.
C. is a much fairer way to allocate society's scarce resources than is the impersonal
marketplace, which is dominated by high-income consumers.
D. involves logrolling, which is always inefficient.
Answer: A
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Models that are similar to RBC models but allow for shocks other than productivity shocks are known as
A. Friedman models. B. DSGE models. C. Solow models. D. Keynesian models.
The incentives built into nearly all welfare programs
A. discourage savings. B. encourage marriage. C. encourage family planning. D. encourage work.
Microeconomics is best described as the study of
A) the choices made by individual households, firms, and governments. B) marginal changes in the economy. C) inflation, unemployment, gross national product, and the nation's economy as a whole. D) how markets interact in the aggregate economy.
By being responsible for their actions
A) moral hazard becomes asymmetric information. B) employees are being given a property right. C) employees find it easier to free ride on the performance of others. D) the stock market is selling the claims of agents.