the most commonly used negative incentive by firms is
What will be an ideal response?
dismissal
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Economists will always reach the same conclusion in their positive analyses
Indicate whether the statement is true or false
The laissez-faire free-market system is
a. an ideal of perfection. b. one that leaves no room for improvement. c. unmatched by any other system for allocative efficiency. d. All of the above are correct.
Middlemen are individuals who
a. add to the buyer's expense without performing a useful function. b. add to the seller's cost without performing a useful function. c. provide services that reduce the cost of transactions and help achieve additional gains from trade. d. act as a middle person between the top management of a business firm and the hourly employees who actually produce the goods and services.
You are given the following information about aggregate demand at the existing price level for an economy: (1) consumption = $400 billion, (2) investment = $40 billion, (3) government purchases = $90 billion, and (4) net exports = $25 billion. If the full-employment level of GDP for this economy is $600 billion, then what combination of actions would be most consistent with closing the GDP-gap here?
A. A decrease in government purchases and an increase in taxes B. An increase in government purchases and a decrease in taxes C. An increase in government purchases and taxes D. A decrease in government purchases and taxes