The government is involved in the U.S. economy for all of the following reasons EXCEPT to
a. promote and encourage competition.
b. prevent monopolies that deny the public the benefits of competition.
c. regulate industries in which a monopoly is in the public interest.
d. promote the development of market externalities.
Ans: d. promote the development of market externalities.
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The above table shows Tammy's total utility from videos and CDs. If Tammy has $70 to spend on videos and CDs and if the price of a video is $10 and the price of a CD is $20, then the maximum utility Tammy can attain is
A) 450. B) 1280. C) 1150. D) 1200.
One of reasons the government may choose to spend would be the:
A. real interest rates decrease. B. real interest rates increase. C. government expected to earn a large return on its spending. D. beliefs about what citizens may need.
The principle involved in short-run uncovered interest parity is that home interest rates will be equal to:
A) the world equilibrium real rate of interest. B) the foreign interest rate minus foreign inflation. C) the foreign rate of interest plus the expected rate of depreciation of the home currency. D) the domestic nominal rate of interest plus domestic inflation.
The long-run supply curve for a purely competitive industry would be horizontal when:
A. An increase in product demand causes an increase in resource prices B. An increase in product demand causes a decrease in resource prices C. A decrease in product demand causes a decrease in the number of firms D. A decrease in product demand causes no effect in resource prices