A type of public policy set in response to rising prices of a basic necessity, such as food, might be:
A. to subsidize the price of those goods.
B. to hire more producers of those goods.
C. to make it illegal to charge higher prices for those goods.
D. All of these are ways government can try to address rising prices of a basic necessity.
Answer: D
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Which of the following is true?
i. A rational choice is made on the margin. ii. Microeconomics is the study of the national economy while macroeconomics is the study of the global economy. iii. Economists try to understand how the economic world works by testing normative statements. A) only ii B) only i C) only iii D) i and ii E) i and iii
Tobacco companies did not resist the advertising ban instituted in 1970 because they actually increased profits by not being allowed to advertise
This ban forced these companies to abandon their dominant strategy of advertising and wind up at a cooperative outcome of not advertising. Prior to the ban, the tobacco companies were involved in playing A) a pure coordination game. B) a prisoner's dilemma game. C) an assurance game. D) a battle of the sexes game.
Compared to corporations, businesses that are proprietorships
A) are far more numerous. B) account for a larger percentage of the economy's total revenue each year. C) can raise capital more cheaply. D) All of the above are correct answers.
Distorting taxes can invalidate Ricardian equivalence because
A) they confuse consumers about the need for government to repay its debt. B) alternative ways of collecting the same tax revenue produce different amounts of lost welfare. C) they are inferior to lump-sum taxes. D) they are more popular, politically, than lump-sum taxes.