An investment tax credit creates jobs mostly for the year in which it is granted.
Answer the following statement true (T) or false (F)
False
A tax cut may also be an effective mechanism for increasing investment spending. Once additional investment spending enters the circular flow, it too has a multiplier effect.
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Define the following terms and explain their importance to the study of economics:
a. antitrust policy b. economies of scale c. economies of scope
Firms with monopoly power tend to be more efficient than competitive firms.
Answer the following statement true (T) or false (F)
When economists talk about "optimal outcomes" in the marketplace, they mean that
A. The allocation of resources by the market is likely to be the best possible, given scarce resources and income constraints. B. The allocation of resources by the market is perfect. C. All the consumer desires are satisfied and business profits are maximized. D. Everyone who wants a good or service can have it.
In the years before the Civil War, Southern states, because of high protective tariffs, were forced to buy most of their manufactured goods from _________.
Fill in the blank(s) with the appropriate word(s).