Which would not be characteristic of a capitalist economy?
A. Competition and unrestricted markets.
B. Reliance on the market system.
C. Government ownership of the factors of production.
D. Free enterprise and choice.
Answer: C
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The liquidity approach to measuring the money supply uses
A) near moneys only. B) M1 only. C) M2 plus some highly liquid assets. D) M1 plus some highly liquid assets.
A unit tax of $1 has been levied on a good. The equilibrium price of the good will most likely
A) increase by $1. B) remain unchanged. C) decrease by $1. D) increase by an amount less than $1.
The difference between short-run and long-run cost is that in the short run,
a. there are shortages of labor that can restrict output b. only labor can be changed to increase or decrease production c. fixed factors of production have already been chosen d. the market-day supply limits the amount by which producers can change production e. all factors of production are variable
To explain the existence of excess capacity, Keynes argued that
A. prices and wages are inflexible in the downward direction. B. the long run average cost curve should not occur at the full employment level. C. prices and wages are flexible, and eventually markets would go back to equilibrium. D. the aggregate demand curve can be manipulated by advertising.