The mixed economy is the dominant economic system in the world because
a. custom and religion have no influence on economic decisions in these systems
b. pure capitalist economies have placed more control in the hands of individuals in recent years
c. there is public (i.e., governmental) ownership of resources but regulation of government by individuals reduces some of the flaws of pure capitalism
d. there is private ownership of property but government regulation of individuals reduces some of the flaws of pure capitalism
e. governments in pure command economies have increased their control over decision-making in recent years
D
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Deposit insurance is a system in which the government guarantees that:
A. people can have deposits at commercial banks. B. commercial banks will not lose any deposits. C. depositors will not lose any money even if their bank goes bankrupt. D. commercial banks will not go bankrupt.
Scott and Cindy both produce only pizza and tacos. In one hour, Scott can produce 20 pizzas or 40 tacos. In one hour, Cindy can produce 30 pizzas or 40 tacos. Based on these data,
A) Cindy has a comparative advantage at producing tacos. B) Scott has a comparative advantage at producing tacos. C) Cindy and Scott have the same comparative advantage in producing tacos. D) neither Cindy nor Scott has a comparative advantage in producing tacos. E) Cindy and Scott have the same comparative advantage in producing pizzas.
Substitution bias:
a. overstates the rise in a consumer’s true cost of living. b. understates the rise in a consumer’s true cost of living. c. overstates the decrease in a consumer’s true cost of living. d. understates the decrease in a consumer’s true cost of living.