Which of the following occurs if government intervention forces the economy inside the production possibilities curve?
A. Income inequality.
B. Market failure.
C. Government failure.
D. Externalities.
Answer: C
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(In/Y) is quite ________ in the U.S. economy, and ________ stay away from its long-run average for several consecutive years
A) stable, yet it can B) stable, so it does not C) volatile, yet it can D) volatile, so it does not
Overseas investments by U.S. citizens show up in the U.S. balance of payments as
a. credit items. b. debit items. c. current account items. d. investment income.
The fact that U.S. managers' salaries are substantially higher than the salaries of comparable managers in Japan may be related to the fact that:
A. there are no government controls on CEOs' earnings in the United States. B. the demand for CEOs has decreased. C. the supply of CEOs has decreased. D. there are more natural monopolies in the United States.
Which of the following statements accurately describes a commonality between the classical and Keynesian schools of thought?
a. Prolonged unemployment is impossible over the long run. b. Wages, prices, and interest rates adjust quickly in the short run. c. In the long run an economy returns naturally to its potential output level. d. Prolonged recessions are due to wage inflexibility.