What is a major disadvantage of a centrally planned economy?
(A) Its military forces are too weak to be effective.
(B) It offers too many choices for consumers.
(C) It cannot meet consumers' needs and wants.
(D) It has no control over which goods and services are provided.
Ans: (C) It cannot meet consumers' needs and wants.
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The American Civil War lasted from the spring of 1861 to the spring of 1865. During the war the Confederate government issued substantial amounts of fiat paper currency
What do you think happened to the price level (measured in Confederate dollars) in the Confederate states during the final months of the war?
If there is a political business cycle and the Federal Reserve supports the incumbent, then we should expect that prior to elections
a. interest rates and output would rise. b. interest rates would rise and output would fall. c. interest rates would fall and output would rise. d. interest rates and output would fall.
A consequence of the economic problem of scarcity is that
A. There is never too much of any good or service produced. B. The production possibilities curve is bowed outward. C. Choices have to be made about how resources are used. D. The production of goods and services must be controlled by the government.
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.