The political business cycle refers to the possibility that:
a. incumbent politicians will be reelected regardless of the state of the economy.
b. politicians will manipulate the economy to enhance their chances of being reelected.
c. there are more recessions prior to elections.
d. recessions coincide with election years.
b
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The opportunity cost of spending four hours at a movie theater watching a double feature the night before a final exam would be
A. the cost of the movie ticket. B. the cost of the subway fare to get to the theater. C. the price of the popcorn and candy bars you snuck into the theater. D. a higher grade on the exam.
Economies of scale enable financial institutions to
A) reduce transactions costs. B) avoid the asymmetric information problem. C) avoid adverse selection problems. D) reduce moral hazard.
Which of the following is not a trade-restricting practice?
a. subsidy b. tariff c. quota d. a voluntary limit on exports e. higher safety standards for imports than for the same good sold domestically.
Micro and macro failures of the marketplace never justify government intervention.
Answer the following statement true (T) or false (F)