Which of the following is a form of government intervention designed to correct market failures?
a) Public goods.
b) Externalities.
c) Antitrust laws.
d) Laissez faire.
Ans: c) Antitrust laws.
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Do people's incomes result from the choices they make?
A) Yes, and from no constraints whatsoever. B) Yes, but from among a limited set of options. C) No, because obviously no one would choose to be poor. D) No, because others often will not let people have what they choose.
As output increases, a typical firm's unit costs
a. decrease because the firm buys its inputs in large quantities b. increase because the supply of inputs increases c. remain constant d. increase due to the increasing scarcity of resources e. decrease as firms take advantage of diseconomies of scale
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and monetary base in the context of the Three-Sector-Model? a. The real risk-free interest rate falls and monetary base falls
b. The real risk-free interest rate rises and monetary base falls. c. The real risk-free interest rate and monetary base remain the same. d. The real risk-free interest rate falls and monetary base rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
One way to solve the problems caused by information asymmetry is:
A. building a reputation. B. signaling. C. screening. D. All of these are solutions to information asymmetry.