The market's allocation of resources is
a. inefficient whenever the government intervenes
b. efficient regardless of whether externalities exist
c. efficient only when externalities exist
d. inefficient whenever externalities are present
e. dependent upon externalities
D
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Studies by economists have tended to show that countries with more independent central banks have
A) lower unemployment. B) more inflation. C) higher unemployment. D) less inflation.
Reducing taxes on capital gains is an example of a supply-side tax cut.
Answer the following statement true (T) or false (F)
Which of the following would be considered a supply-side policy?
A. an increase in government regulations that require businesses to internalize pollution costs B. decreasing taxes to increase the incentive to work C. an increase in government spending that would lead to increased aggregate demand D. increasing the amount of Social Security contributions paid by businesses to help fund the Social Security program
Why is it useful to make a distinction between debt and equity instruments?
What will be an ideal response?