Capital is defined as
a. a flow of money into a business to buy various inputs.
b. automated production processes which require little or no labor.
c. interest payments to owners of companies.
d. an inventory of plant, equipment and other productive resources held by a firm.
d
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One common source of market failure is
A) perfect information. B) pollution. C) private goods. D) perfect competition.
As the price of a product falls, the demand for the product increases, ceteris paribus
Indicate whether the statement is true or false
If you sell your DVD player on eBay, you will be better informed about the quality of the product than any potential buyer. This is called
A) adverse selection. B) asymmetric information. C) moral hazard. D) opportunistic behavior.
If the Congress passes legislation to decrease government spending to control demand-pull inflation, then this would be an example of a(n):
a. Nondiscretionary fiscal policy b. Automatic stabilizers c. Contractionary fiscal policy d. Expansionary fiscal policy