Which of the following statements does not apply to a market economy?
a. Firms decide whom to hire and what to produce.
b. The "invisible hand" usually maximizes the income of society as a whole.
c. Households decide which firms to work for and what to buy with their incomes.
d. Government policies are the primary forces that guide the decisions of firms and households.
d
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The above figure shows the U.S. market for chocolate. With international trade, the gain in total surplus is equal to
A) area B. B) area A + area B + area C + area D. C) area B + area C + area D + area E. D) area C + area D. E) area B + area C + area D.
In a frictionless world
A) Fully funded social security must necessarily make everyone better off, as it provides for retirement. B) Fully-funded social security is a constraint on private saving behavior, and therefore cannot make anyone better off. C) Fully funded social security is always preferred to pay-as-you-go social security. D) Fully funded social security is more efficient, because it is a private program instead of a government program.
A factor increasing the popularity of monetarism in the late 1970s was the
a. ease with which the Fed controlled the money supply. b. excellent performance of the economy in the 1970s. c. the fear of budget deficits and growing federal debt. d. the predictable behavior of velocity until about 1980.
When quantity supplied is greater than quantity demanded, the price will _____.
Fill in the blank(s) with the appropriate word(s).