How does government's power to coerce behavior tend to reduce private-sector risk?
A. By enforcing contracts and discouraging illegal behavior that threatens private property.
B. By guaranteeing that the government will financially cover any losses by private-sector
firms.
C. By strictly regulating the allocation of most property resources in the economy.
D. The coercive power of government only increases private-sector risk.
Answer: A
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The De Beers diamond mining and marketing company of South Africa became one of the most profitable and longest-lived monopolies in history. Which of the following has always threatened De Beers' control of the diamond market?
A) At different times in the past some countries have banned the importation of diamonds from South Africa for political reasons. B) Competition from imitation diamonds. Technology has made it possible to make fake diamonds look exactly like real diamonds. C) Competition from other gemstones, including rubies and emeralds, that have become more popular over time. D) Since few diamonds are ever destroyed, De Beers has constantly faced possible competition from other firms reselling diamonds.
When the minimum wage is set below the market equilibrium wage, it does not affect the market.
Answer the following statement true (T) or false (F)
An increase in the nominal exchange rate, e, defined as the number of units of the foreign currency that one unit of the domestic currency will buy, indicates that the domestic currency has ________ relative to the foreign currency.
A. become undervalued B. depreciated C. appreciated D. become overvalued
Marginal propensity to consume (MPC) is the fraction of extra income that a household spends on consumption.
Answer the following statement true (T) or false (F)