The term "market failure"
a. means the same thing as "market power."
b. refers to the dissolution of a market when firms decide to quit producing a certain product.
c. refers to the failure of a market to produce an efficient allocation of resources.
d. refers to government's failure to enforce the property rights of households or firms that participate in a certain market.
c
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In order for a policy option to achieve allocative efficiency,
a. PVNB must be maximized c. PVC must be minimized b. PVB must be minimized d. (PVB – PVC) must be minimized
If a shift in SRAS results from gains in productivity growth, the effect will be
a. relatively small over a few months or even a couple of years. b. relatively large over a few months or even a couple of years. c. relatively small over a few months but larger over a couple of years. d. relatively large over a few months but smaller over a couple of years.
Citizens Bank confronts a reserve requirement of 20 percent and currently holds millions of dollars in excess reserves. If a depositor withdraws $35,000 . the excess reserves of the bank will
a. decline by $7,000. b. decline by $35,000. c. decline by $28,000. d. increase by $7,000.
Which of the following is a valid concern about the national debt for a country whose debt is held entirely by its citizens?
a. The welfare of future generations will be directly related to the per capita size of the national debt that they inherit. b. Growth of the national debt will eventually lead to the bankruptcy of the government. c. When the debt comes due, future generations may be unable to pay it off. d. If the increases in the national debt reduce private expenditures on capital formation, future generations may have lower incomes because they will inherit a smaller stock of capital.