The condition in an economy that makes a "rationing device" a necessity is:
A) the economy is organized around free markets.
B) the economy is centrally planned by the government.
C) scarcity exists.
D) there are fewer types of goods than there are people in the economy.
C
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The approach to understanding the determination of real GDP and the price level that emphasizes flexible wages and prices and competitive markets is
A) the Keynesian model. B) the classical model. C) Adam Smith's Law. D) the aggregate demand model.
Data indicates that recessions following financial crises ________ recessions which do not follow financial crises
A) are more severe than B) are equally severe as C) are less severe than D) Data does not show any link between the severity of recessions following financial crises.
In his classic treatise on public finance, Richard Musgrave says the economic activities of the state can be broken down into _____
a. allocation, distribution, production b. allocation, distribution, stabilization c. allocation, production, protection d. production, protection, allocation
In the short run, a firm will stay in business as long as:
a. price equals average revenue. b. marginal revenue is greater than or equal to marginal cost. c. price exceeds average variable cost. d. price is less than average variable cost.