Compared to the private sector, the distinguishing characteristic of government is its
What will be an ideal response?
monopoly on the legitimate use of force on adults.
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When the Fed buys U.S. government securities from a bank, that bank's excess reserves and required reserves increase but total reserves decrease
a. True b. False Indicate whether the statement is true or false
Social regulation means that the government dictates the price that a firm must charge and/or the quantity that a firm must supply
a. True b. False Indicate whether the statement is true or false
The term for an innovative new product or production technology that disrupts the status quo in a market, leading the innovators to earn more income and profits and the other firms to lose income and profits, unless they can come up with their own innovations is called a(n)
a. innovative market change b. disruptive market change. c. productivity market change d. technological market change
Which of the following holds true in a market when the invisible hand functions properly?
a. MC = MU = P b. P = MRS c. P = MC but not P = MU d. P = MU but not P = MC