In a free market economy,
A. problems with externalities can never be solved.
B. public goods will be efficiently provided by the private sector.
C. detrimental externalities are rare.
D. externalities can be solved by policy makers using market methods.
Answer: D
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Which of the following is the best example of money?
A) share of Intel stock B) checkable deposit C) credit card D) phone card E) gold
Suppose in the money market the equilibrium nominal interest rate is 5 percent. If the Fed increases the quantity of money, what is the effect on the nominal interest rate?
What will be an ideal response?
Assuming no change in the effective tax rate on capital, an increase in the government budget deficit will reduce the current account deficit if and only if the increase in the budget deficit
A) reduces desired national saving. B) increases desired national saving. C) reduces desired national investment. D) increases desired national investment.
Which of the following is correct?
a. Efficiency deals with the size of the economic pie, and equality deals with how fairly the pie is sliced. b. Equality can be judged on positive grounds whereas efficiency requires normative judgments. c. Efficiency is more difficult to evaluate than equality. d. Equality and efficiency are both maximized in a society when total surplus is maximized.