When quantity supplied equals quantity demanded:
A. the market forces push the economy to produce less.
B. equilibrium is reached.
C. the market forces cease to function.
D. the market forces push the economy to produce more.
Answer: B
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Asymmetric information occurs when
A) buyers and sellers are not equally informed about the true quality of what they are buying and selling. B) banks face an adverse selection problem with their borrowers. C) borrowers covertly engage in activities that increase the probability of poor performance. D) All of the above.
The New Classical assumption of how quickly markets clear is actually most appropriate in the analysis of
A) the labor market. B) the aggregate good market. C) financial markets. D) the market for consumer durables.
Since 1940 the percentage of elementary and secondary educational expenditures financed by local governments _____
a. declined by around 10 percentage points b. increased by around 10 percentage points c. increased by around 5 percentage points d. declined by around 15 percentage points
All of the following are examples of automatic stabilizers except
A) personal income taxes. B) means-tested federal transfer payments. C) welfare benefits. D) government emergency spending.