Historical evidence suggests that:
A) command economies perform better than free economies in the long run.
B) free economies perform better than command economies in the long run.
C) social surplus is maximized in a command economy.
D) social surplus is minimized in a free economy.
B
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If autonomous spending increases by $500 billion and, as a result, equilibrium real GDP increases by $2 trillion, then we know that the
A) expenditure multiplier is 0.25. B) MPC equals 1. C) expenditure multiplier is 4.0. D) expenditure multiplier is 2.0. E) MPC is greater than 1.
__________ buy or sell futures contracts to reduce their exposure to the risk of future price movements in the underlying asset
A) Hedgers B) Speculators C) Arbitrageurs D) None of the above.
In the consumption function, suppose a = 60, c = 0.75, Y = 3000, and T = 800. Consumption expenditure is
A) 2910. B) 2245. C) 1710. D) 1590. E) 1510.
Conducting expansionary monetary policy when the economy is at its long-run equilibrium causes the Phillips Curve to:
A. shift straight up. B. shift straight down. C. become less steep. D. become more steep.