Explain why insurance has been beneficial to markets
What will be an ideal response?
Insurance reduces the risk of entrepreneurs.
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If potential output equals 4,000 and short-run equilibrium output equals 3,500, there is a ________ gap and the Federal Reserve must ________ real interest rates in order to close the gap.
A. expansionary; raise B. recessionary; not change C. recessionary; reduce D. recessionary; raise
Which of the following gave the U.S. federal government the power to tax income?
A. The Full Employment and Balanced Growth Act of 1978. B. The capital gains tax of the Bush administration. C. The Sixteenth Amendment to the Constitution. D. The Social Security Act.
An economy eliminates a recessionary gap by reducing wages and prices.
Answer the following statement true (T) or false (F)
The figure above shows the market for coffee. If the efficient quantity of coffee is produced, the producer surplus is
A) $10 million. B) $20 million. C) $60 million. D) zero.