Allocative efficiency occurs where the collective sum of consumer and producer surplus is at a maximum.
a. true
b. false
Answer: a. true
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The prime engine of growth in market economies is
A) government spending B) consumer spending C) innovation D) private saving
The increase in quality bias in the consumer price index refers to the idea that price increases in the CPI reflect pure inflation, but ________ quality increases. This causes the CPI to ________ the cost of the market basket
A) not; overstate B) also; understate C) also; overstate D) not; understate
Like the monetarists, new classical economists favor
a. money growth aimed at achieving a nominal GDP target. b. discretionary policy action. c. a money growth rate that stabilizes output. d. a money growth rule that guides monetary policy.
Which of the following is infrastructure?
a. Highways. b. Bridges. c. Airports. d. All of these.