Socialism is correctly described by which of the following statements?
A. Central planning is used exclusively to answer the basic economic questions.
B. Markets are used exclusively to answer the basic economic questions.
C. Tradition is used exclusively to answer the basic economic questions.
D. Government ownership of many resources and centralized decision-making answers the basic economic questions.
Answer: D
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The concept of Pareto optimality is a
A) utopian concept. B) useful concept because it guarantees economic equality. C) useful concept because it defines economic efficiency. D) useful concept that carefully balances a society's desires for equality and efficiency.
Monetary policy affects aggregate demand with a lag. Approximately how long does it take for monetary policy actions to affect aggregate demand?
Which of the following would be considered the most prominent monetarist?
A. John Maynard Keynes B. Adam Smith C. Karl Marx D. Milton Friedman
In the figure below, AB is the production-possibility curve of Canada. The line PQ shows the price ratio of one bushel of wheat/bale of cotton. The international price ratio is 0.25 bushels of wheat/bale of cotton as shown by the line RS. I1 and I2 are two of the community indifference curves of Canada. After Canada engages in free trade, it will:
A. produce at point S1 and consume at point C1. B. produce at point S1 and consume at point C0. C. produce and consume points not labeled in the graph. D. produce and consume at point C0.