What is allocative efficiency?
A) It refers to a situation in which resources are allocated such that the last unit of output produced provides a marginal benefit to consumers equal to the marginal cost of producing it.
B) It refers to a situation in which resources are allocated to their highest profit use.
C) It refers to a situation in which resources are allocated such that goods can be produced at their lowest possible average cost.
D) It refers to a situation in which resources are allocated fairly to all consumers in a society.
A
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Asymmetric information is a form of
A) market imperfection. B) regulatory arbitrage. C) capital market liberalization. D) financial sector deregulation.
A depreciation of one's currency means that:
a. the country's exports will become more expensive. b. the country's imports will become more expensive. c. the country's imports will become less expensive. d. it now requires less of this currency in exchange for one unit of another currency. e. it now requires more units of other currencies in exchange for one unit of this currency.
The labor force participation rate is defined as the number of
a. unemployed individuals plus employed individuals divided by the number of individuals in the working-age population. b. employed individuals divided by the number of individuals in the working-age population. c. unemployed individuals plus employed individuals divided by the number of employed individuals. d. employed individuals divided by the number of individuals employed plus the number of unemployed individuals.
Assume individuals consider only the long run effects of changes in future macro variables when forming expectations of future output and future interest rates. Suppose current government spending increases and that individuals expect future government spending to increase. Given this information, we know with certainty that
A) current output and the current interest rate will both increase. B) current output will not change. C) future expected output will decrease. D) future expected output will not change.