Which of the following is not considered a rationale for the intervention of government in the market process in the United States?
A) the redistribution of income
B) the reallocation of resources
C) the long-run planning of scarce resources
D) the short-run stabilization of prices
E) All of the above
C
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Assuming all else equal, if the demand for a firm's product falls, ________
A) the firm moves to a lower point along its labor demand curve B) the firm moves to a higher point along its labor demand curve C) the firm's labor demand curve shifts to the left D) the firm's labor demand curve shifts to the right
Explain how menu costs affect the slope of the short-run aggregate supply curve
What will be an ideal response?
Refer to Figure 12.1. Assuming the economy is on the production possibilities curve, crowding out suggests that an increase in government spending financed by internal borrowing would move the economy from point 
A. C to point E. B. C to point A. C. C to point F. D. A to point C.
Which of the following is not a policy implication of the traditional model?
A. There is a potential role for government if there are positive externalities. B. For the most part, the government needs to stay out of people's way and let them trade. C. There is a potential role for government if there are negative externalities. D. The government should take moral and social incentives into account when considering intervention.