In a capitalistic economy:
A. consumers are not sovereign.
B. there is a reliance on the market system.
C. markets are not competitive.
D. the government owns the means of production.
Answer: B
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A movement up along a supply curve indicates:
a. a rise in supply. b. an increase in the quantity supplied. c. an increase in the sales tax on a good. d. a reaction by suppliers to a decrease in demand.
Which of the following models results in the greatest total profit, assuming a fixed number of firms with identical costs and a given demand curve?
A) Cournot B) Stackelberg C) Monopoly D) Perfect competition
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.
The experience of the 1970s and 1980s suggests that the cost of engaging in the process of disinflation is that
A. exports must increase. B. deflation must occur. C. nominal interest rates will be expected to increase. D. unemployment will most likely increase.