A system of private property rights
A) encourages economic growth by creating incentives to invest in capital and to be innovative.
B) discourages economic growth by discouraging the development of new ideas and ways of doing things.
C) reduces the efficiency of government, which reduces the growth rate of the economy over time.
D) encourages investment but discourages entrepreneurial activity, so the effect on economic growth is uncertain.
A
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A negative externality exists when
A. marginal social costs are less than marginal private costs. B. marginal social costs are greater than marginal private costs. C. marginal social benefits are less than marginal private benefits. D. marginal social benefits are greater than marginal private benefits. E. b and c
The deposit expansion multiplier is decreased if the Federal Reserve
A) buys government securities. B) sells government securities. C) lowers reserve requirements. D) raises reserve requirements.
The research of Ben Bernanke (1983) found the banking system of the 1930s to be fundamentally flawed and unable to serve its function of financial intermediation. Federal help was needed
Indicate whether the statement is true or false
In the short run, the relevant costs for a firm to consider whether to shut down production are:
A. average total costs. B. average variable costs. C. fixed costs. D. average fixed costs.