Answer the following statement true (T) or false (F)
1) The government's ability to force people to do things can increase economic efficiency.
2) Government's ability to enforce laws and contracts increases private-sector economic risks.
3) The invisible hand guides government's economic activity just as it does with private economic
activity.
4) Because of the force of law and bureaucratic structure, government accountability is less of a
problem than in the private sector.
1) T
2) F
3) F
4) F
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According to the Application, the market price of meteorites varies from a few dollars per gram to hundreds of dollars per gram. In a market system like the market for meteorites, prices vary due to
A) government intervention in the pricing of the products. B) outsourcing. C) the lack of accounting rules in this market. D) the relative scarcity, or rarity, of the product.
Year-to-year movements in real exchange rates between industrialized countries like the U.S. and Canada are caused mostly by
A) changes in relative rates of inflation. B) changes in relative growth rates of output. C) changes in quotas or tariffs. D) changes in capital controls. E) changes in nominal exchange rates.
If the GDP deflator decreases from 100 to 90 when you had $4,000, then
A. the value of the $4000 decreases. B. the value of the $4000 remains constant. C. the $4000 will buy 10 percent less of the goods and services produced by society. D. the $4000 will buy 10 percent more of the goods and services produced by society.
All of the following are long-run changes, except:
A. An industry expands as more firms enter it B. A firm moves into larger production facilities to expand production C. Some firms decide to leave an industry and the industry contracts D. A firm produces more output by acquiring more raw materials for its existing factory