A justification for government price supports on agricultural products that economists generally accept as potentially legitimate is
A. the market punishes innovation.
B. the price variability needs to be dampened.
C. the market favors milk producers.
D. the market is unfair to poor farmers.
Answer: B
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Some charge that third-degree price discrimination is unfair or that it reduces social welfare. Why does charging one group a lower price hurt anyone?
What will be an ideal response?
If an excess quantity of labor demanded exists in a free market, there is a tendency for
A) quantity supplied to rise. B) the wage rate to fall. C) quantity demanded to fall. D) the wage rate to rise.
The modern view of the Phillips curve suggests that
a. when inflation is less than anticipated, unemployment will fall below the natural rate. b. when inflation is steady, actual unemployment will equal the natural rate of unemployment. c. systematic demand stimulus policies will be unable to affect prices in the long run. d. there will be a trade-off between inflation and unemployment in the long run.
The Fed has which of the following as its strongest control over the money supply?
A. Interest rate changes B. The discount rate C. Open-market operations D. The required reserve rate