What best describes the role of government in a free enterprise system?
What will be an ideal response?
Ans: Allow individuals to operate their businesses in ways they think will maximize their profits.
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Use the figure below to answer the following question.
If actual production and consumption occur at Q1
A. economic surplus is maximized. B. missing surplus of b + d occurs. C. missing surplus of e + d occurs. D. consumer surplus is maximized.
________ will increase current consumption, saving, and future consumption
A) an increase in future income B) an increase in initial wealth C) an increase in current income D) a decrease in the real interest rate
Unlike World War I (1914–18), the war debt of World War II (1941–45) was manageable and did not contribute to inflation
Indicate whether the statement is true or false
Assuming MPC is 0.90, what effect, if any, would a change in U.S. net exports of minus $20 billion have on the U.S. level of national income?
a. No effect since the goods would be consumed abroad b. National income increases by $200 billion c. National income decreases by $200 billion d. National income increases by $20 billion e. National income decreases by $20 billion