A fundamental difference between the command system and laissez-faire capitalism is that, in command systems:
A. the division of output is decided by central planning rather than by individuals operating
freely through markets.
B. all economic decisions are made by the government, whereas there is no government in
laissez-faire capitalism.
C. scarcity does not exist, whereas it does in laissez-faire capitalism.
D. money is not used, whereas it is in laissez-faire capitalism.
Answer: A
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The largest government-run health care system in the world, with 1.7 million employees, is in
A) the United Kingdom. B) the United States. C) Japan. D) Canada.
The free rider problem refers to a situation in which
A) the marginal cost of allowing additional consumers to consume a public good is zero. B) high income individuals subsidize the production of goods, such as education, that make society better off. C) people consume a pure public good without payment, even though the good may not be produced if no one chooses to pay. D) markets fail to allocate resources efficiently when benefits outweigh costs.
Keynesians believe that the interest elasticity of money demand
a. is lower than that believed by monetarists. b. is higher than suggested by monetarists. c. is completely elastic. d. is completely inelastic. e. none of the above.
A change in expected inflation shifts
a. the short-run Phillips curve, but not the long run Phillips curve. b. the long-run Phillips curve, but not the long run Phillips curve. c. neither the short-run nor the long-run Phillips curve. d. both the short-run and long-run Phillips curve right.