Governments have often intervened in financial markets because they believed that
a. interest rates were too low
b. competition among banks leads to poor services
c. bank lending was favoring lucrative projects at the expense of crucial development needs
d. too much foreign money was entering their financial systems
e. all of the above
C
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There is a distinction between the long-run aggregate supply (LRAS) curve and the short-run aggregate supply (SRAS) curve. In the long run
A. technology is fixed, but not in the short run. B. all adjustments to changes in the price level have been made, but in the short run all changes in the price level do not occur. C. the price level is constant in the long run, but fluctuates in the short run. D. the aggregate supply curve is horizontal, while in the short run it is upward sloping.
We can say that output has definitely been expanded too far when we reach the point of
A. increasing returns. B. diminishing returns. C. negative returns.
One productivity standard for income distribution stated in the text is
A. tax payments are higher for higher income people. B. poor people pay too much in taxes. C. the poor should contribute more to society. D. income distribution should be based on contribution to society's total output.
Refer to Table 2-5. Estonia has a comparative advantage in the production of
A) neither product. B) lumber. C) cell phones. D) both products.