Which of the following will tend to socialize losses and privatize gains?
A. Lowering interest rates to encourage private borrowing and investment.
B. Government regulation to promote human safety and environmental protection.
C. Government creating projects rather than supporting private efforts.
D. Government guarantees to private investors that they will get their money back even if the
company fails.
Answer: D
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Some pet owners are using an "invisible fence" to keep their animals from straying. Every time the animal steps over the edge of the property, it gets a mild shock. A social scientist would call the shock
A) a bribe. B) a reward. C) a disincentive. D) a normative incentive.
The nation's largest cable TV company tested the effect of a price increase for premium sports channels. It increased prices 10% and found that the number of customers decreased by more than 40%. This means: a. the demand curve for the premium sports channels shifted to the right. b. the supply curve for premium sports channels shifted to the left
c. the demand for premium sports channels is elastic in this price range. d. the demand for premium sports channels is inelastic in this price range.
Other things being equal, a decrease in an economy's exports will
A. decrease domestic aggregate expenditures and the equilibrium level of GDP. B. increase domestic aggregate expenditures and the equilibrium level of GDP. C. increase the amount of imports consumed by the private sector. D. have no effect on domestic GDP because imports will offset the change in exports.
Suppose Ralph sells bento lunches, which have the following demand:
pR = 100 – qR – 0.5qD where pR is the price of Ralph's bentos and qR is the number of bentos Ralph sells. qD is the number of bentos Ralph's rival, Dave, sells. Dave's demand is given by: pR = 100 – qD – 0.5qR where pD is the price Dave can sell his bentos for. Suppose each seller has a cost per unit (average and marginal) of $1. a. How does this game differ from the Cournot model with identical products? Why do the demand curves indicate that the goods are differentiated – not perfect substitutes for one another? b. Compute the best response functions for each seller and the Nash Equilibrium outputs and prices.