Government intervention in the economy:
A.) Always fixes macroeconomic market failures.
B.) Always fixes microeconomic market failures.
C.) Always makes the economy worse off.
D.) May fix market failures or make the economy worse off.
D.) May fix market failures or make the economy worse off.
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Well-functioning financial markets
A) cause inflation. B) eliminate the need for indirect finance. C) cause financial crises. D) allow the economy to operate more efficiently.
One of the interesting findings of a survey of firm managers by Blinder et al. is that:
A) the vast majority of firms pay considerable attention to marginal costs in making decisions about how much output to produce. B) the majority of respondents suggested that fixed costs are a relatively unimportant consideration when making output decisions. C) approximately 75 percent of respondents indicated that their marginal costs of production are rising over the relevant range of output. D) a significant percentage of respondents to the survey did not appear to understand the concept of marginal cost.
Which of the following rates of growth in the money supply is likely to lead to the lowest level of inflation in the economy?
a. 1 percent per year b. 3 percent per year c. 5 percent per year d. 7 percent per year
Reaching a Nash equilibrium means that:
A. the outcome will be positive-positive. B. the players have failed to reach a stable outcome because one player will always wish to change his strategy once he finds out what the other player is doing. C. a cooperative equilibrium has been reached. D. the players have reached a stable outcome where neither would wish to change his strategy once he finds out what the other player is doing.