Which of the following is NOT a key economic feature of the European Union (EU)?
A. London's dominance as Europe's financial center
B. A single market that promotes free movements of goods, services, financial capital, and people among EU member countries
C. A customs union, which imposes common tariffs on imports from non-EU
D. A common currency, the euro, used by all member countries
Answer: D
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Monetarists view government intervention in the economy as
A) necessary to maintain full employment. B) unnecessary and potentially damaging. C) effective because it stimulates capital formation. D) leads to consistently higher employment and output.
In a competitive price-taker market, the actions of any single buyer or seller will
a. have a negligible impact on the market price. b. have little effect on overall production but will ultimately change final product price. c. cause a noticeable change in overall production and a change in final product price. d. adversely affect the profitability of more than one firm in the market.
Inflation can cause a misallocation of resources because
A. firms have to change their price labels at unusual times. B. the nominal rate of inflation doesn't equal the real rate of inflation. C. people are encouraged to borrow too much. D. inflation doesn't proceed evenly which means that people have a difficult time determining when a price change signals a change in relative prices.
In the presence of a negative externality generated by producing a good, a competitive market will produce more of that good than is socially optimal
What will be an ideal response?