Government attempts to offset market failures can prevent the market from dealing with a problem more effectively.
Answer the following statement true (T) or false (F)
True
The market's way of dealing with problems generally works only in the long run. If government deals with the problems in the short run, it may eliminate incentives that would have brought about a long-run market solution.
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Over the last 50 years, has the ratio of household production to gross domestic product in the United States increased or decreased? Consider the effect of the increased number of women working outside the home, and the effect of advances in
technology in household production such as microwaves, coffee makers, power tools, etc.
What are the transactions that the balance of payments accounts record?
What will be an ideal response?
In the short run, it is impossible for an expansion of output to cause an increase in: a. ATC
b. AVC. c. AFC. d. MC.
If the federal government were to run a budget surplus, this would
a. increase the size of the national debt. b. reduce the size of the national debt. c. leave the size of the national debt unchanged. d. decrease the national debt only if the government also reduces the supply of money.