Welfare capitalism is an economic system in which:
A. laissez-faire operates unimpeded.
B. government owns all of the means of production.
C. markets operate, but government regulates markets significantly.
D. markets operate without government regulation.
Answer: C
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
A tax that reduces economic efficiency is always bad policy.
Answer the following statement true (T) or false (F)
How do people maximize net gains from the decisions they make?
a. by choosing to participate only in activities with increasing marginal benefits b. by choosing to participate only in activities without costs c. by pursuing an activity until marginal cost equals marginal benefit d. by including sunk costs as a relevant cost in all decisions
In market capitalism:
A) factors of production are privately owned and decisions are made privately. B) factors of production are owned by the government but decisions are made privately. C) there is no role for government. D) the consumer has few choices to make.