Governments invest in infrastructure to:
A. to spur economic growth.
B. to increase the growth rate of GDP per capita.
C. to increase the productivity of businesses.
D. All of these are reasons why the government provides infrastructure.
Answer: D
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All the following are assumptions of the classical model EXCEPT
A) pure competition exists. B) buyers and sellers react to nominal money prices rather than to relative prices. C) wages and prices are flexible. D) people are motivated by self-interest.
For a perfectly competitive firm, profit is maximized at the output level where i. total revenue exceeds total cost by the largest amount. ii. marginal revenue equals marginal cost. iii. price equals marginal cost
A) i only B) ii only C) ii and iii D) i and ii E) i, ii, and iii
Using the government as a means of redistribution generates equity at the cost of efficiency, in part because
A) the process of redistribution uses up some of society's resources. B) the process of redistribution creates new resources for society. C) redistribution creates new incentives to work for both rich and poor. D) redistribution would not take place otherwise.
The total quantity of an economy's final goods and services demanded at different inflation rates is
A) the aggregate supply curve. B) the aggregate demand curve. C) the Phillips curve. D) the aggregate expenditure function.