Which of the following groups agree that government intervention in the economy is counterproductive even in the short run?
a. Keynesians and supply-siders
b. Keynesians and neo-Keynesians
c. Keynesians and rational expectations economists
d. neo-Keynesians and rational expectations economists
e. Rational expectations economists
E
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The evidence from banking crises in other countries indicates that
A) deposit insurance is to blame in each country. B) a government safety net for depositors need not increase moral hazard. C) regulatory forbearance never leads to problems. D) deregulation combined with poor regulatory supervision raises moral hazard incentives.
In the long run, which of the following is not a problem for a monopolist earning economic profit?
a. other firms have an incentive to create substitutes for the monopolist's product b. technological change tends to break down barriers to entry c. patents expire, licenses must be renewed, and new sources of essential resources may be discovered d. government often decides to regulate monopolies e. all profit will gradually be converted to consumer surplus
Suppose Congress increases income taxes. This is an example of
A) expansionary fiscal policy. B) expansionary monetary policy. C) contractionary fiscal policy. D) contractionary monetary policy.
Which statement is FALSE considering both advantages and disadvantages of corporations as a legal business organization?
A) Perhaps the greatest advantage of corporations is that their owners (the shareholders) enjoy limited liability—limited to the value of their shares. B) Legally the corporation continues to exist even if one or more owners cease to be owners. C) Corporations usually are not as well positioned as proprietorships and partnerships to raise large sums of financial capital. D) Separation of ownership and control is a disadvantage of the corporate structure; owners and managers may have different incentives.