The "Public Choice" school of economists argue that:
a. the invisible hand of the market is inefficient in allocating resources to their best uses.
b. the government often does not take correct economic decisions as it is run by self-interested politicians.
c. the government takes correct decisions as it is run by conscious and educated individuals.
d. the market fails to maximize social efficiency.
e. the government is a non-profit making organization which works to maximize social efficiency.
b
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A factor that turned out to be a weakness of the classical theory of growth is its
A) emphasis on saving and investment. B) assumption that the growth rate of the population increases when income increases. C) reliance on constant growth in technology. D) neglect of the subsistence real wage.
How do lower taxes affect aggregate demand?
A) They increase disposable income, consumption, and aggregate demand. B) They increase aggregate supply and thus increase aggregate demand as well. C) they increase corporate investment and aggregate demand. D) They reduce disposable income, consumption, and aggregate demand.
In the Solow model, if total saving exceeds depreciation:
A. capital deepening stops. B. gross investment is negative. C. real wages decrease. D. capital stock increases.
For a monopolist, the marginal revenue gained when one more unit of output is sold is
A. the average revenue created by the increased sales. B. negative if price is above the midpoint of the demand curve. C. equal to the price of the product. D. the price at which the extra unit is sold minus the loss in revenue that results from cutting the price on units sold previously.