When Congressional decision makers chose not to raise taxes to fight the war on terrorism, they
A. borrowed the money, but the opportunity cost still existed in the form of higher interest rates and/or crowding out.
B. showed that borrowed money has no opportunity cost.
C. showed opportunity cost exists by eliminating Social Security.
D. showed that there is no opportunity cost to defense spending when you are required to spend it.
Answer: A
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The "lemons problem" exists in the market for goods because
A) sellers tend to try to take advantage of buyers. B) buyers tend to try to take advantage of sellers. C) differences in the quality of the goods being exchanged. D) of moral hazard.
Which of the following best illustrates perfect competition?
a. Wheat farming. b. Orange growers setting quotas under the Sunkist cooperative. c. General Motors advertising campaign for its cars. d. All of these.
Unemployment that results from technological changes that renders some people's skills obsolete is called: a. frictional unemployment. b. cyclical unemployment
c. structural unemployment. d. seasonal unemployment.
Which national income account should be examined to discover trends in the after-tax income that people have to save and spend?
a. Gross domestic product (GDP) b. Gross national product (GNP) c. Disposable personal income (DI) d. National income (NI)