The main rationale for government regulatory functions is
A) to regulate for-profit institutions.
B) to make sure that firms are maximizing profits.
C) to expand the scope of the government.
D) to protect consumer interests.
Answer: D
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In the classical model, high unemployment due to a change in aggregate demand
A) can persist for an indefinite period of time. B) will return to its normal level quickly as wages adjust. C) will persist if due to a supply shock but not if due to a demand shock. D) never exists because unemployment can never deviate from its normal level.
In the opening of free trade, if world prices of a good are less than domestic prices of that same good,
a. domestic consumers will experience a loss of surplus. b. domestic prices will drop to the world price level. c. all domestic producers of that good will try to find another market because they can't compete with foreign producers. d. domestic producers will increase the quantity supplied in order to crowd out the foreign-produced good.
The major source of financing in the Anglo Saxon model is:
a. Securities markets b. Secondary market financing c. The sale of treasury bonds d. Bank financing e. None of the above
When policymakers set prices by legal decree, they obscure the signals that normally guide the allocation of society's resources
a. True b. False Indicate whether the statement is true or false