When faced with a market failure, the government:
A. usually tries to redistribute the existing surplus more fairly.
B. always takes over the market.
C. often encourages the well-functioning firms to stay through protectionist policy.
D. generally enacts thoughtful policy in order to create market efficiency.
D. generally enacts thoughtful policy in order to create market efficiency.
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A merger between U.S. Steel and General Motors would be an example of a
A) conspiracy in restraint of trade. B) horizontal merger. C) conglomerate merger. D) vertical merger.
Assume that the currency-deposit ratio is 0.5. The Federal Reserve carries out open-market operations, purchasing $1 million worth of bonds from banks. This action increased the money supply by $2 million. What is the reserve-deposit ratio?
A. 0.40 B. 0.50 C. 0.35 D. 0.25
If the federal funds rate is set by the Taylor rule and the output gap increases by 5 percentage points, everything else remaining unchanged, the federal funds rate should ________
A) decrease by 2.5 percentage points B) decrease by 5 percentage points C) increase by 5 percentage point D) increase by 2.5 percentage points
A trend is a general tendency for a variable to increase or decrease over time
Indicate whether the statement is true or false