Stagflation exists when prices
a. rise and unemployment falls.
b. rise and unemployment rises.
c. fall and unemployment rises.
d. fall and unemployment falls.
b
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The saying “the lower the price, the better” may not always be correct for an economy’s public interest because
A. people should have to pay for what they want. B. people will overuse something they perceive as being cheaper than the utility they receive for it. C. the government can no longer afford to provide all the goods and services it provides because it is slowly going broke. D. cheaper prices will make people buy less of other things.
What is the incentive for a firm to join a cartel?
A) to be able to earn larger profits than if it was not part of the cartel B) to be able to earn profits in the long run but not in the short run C) to produce a larger amount of output than if it was not part of the cartel D) to completely insulate itself from competition
The principle of fractional reserve banking makes it possible for a
A) bank to make loans. B) bank to print currency. C) bank to avoid reserve requirements. D) bank to sell securities.
Market failure results in
A. Pareto efficiency. B. no goods being produced. C. economic collapse. D. lost surplus.