In the period 1960–95, the federal government
(a) played, in general, a much larger role in the economy during this period than prior to World War II.
(b) played a small role in the economy, similar to the 1920s.
(c) eliminated most of the major programs for the federal government that were established by the New Deal in the 1930s, while state and local governments began to play a larger role in the economy.
(d) played a large role in defense spending but followed basically a laissez-faire policy toward the rest of the economy.
(a)
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The inverse supply curve of coffee beans equals P = -5 - 2rain + Qs, where rain equals the number of inches of rain per year. How much does quantity supplied change when rain increases from 30 inches to 40 inches per year?
A) Qs decreases by 40. B) Qs increases by 40. C) Qs increases by 30. D) Qs decreases by 30.
Describe the invisible hand theory.
What will be an ideal response?
If Figure 8.1 depicts the current situation for a monopolistically competitive firm, then in the long run we expect:
A. the firm to charge a price higher than P1. B. the firm to produce and sell more than Q1. C. the average costs of production to decrease below AC1. D. the firm to charge a price lower than P1.
A decrease in the long-run average costs resulting from increasing output is referred to as
A) diseconomies of scale. B) constant return to scale. C) a scale invariant process. D) economies of scale.