The basic principles of economics suggest that
a. markets are seldom, if ever, a good way to organize economic activity.
b. government should become involved in markets when trade between countries is involved.
c. government should become involved in markets when those markets fail to produce efficient or fair outcomes.
d. All of the above are correct.
c
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The standard way to measure the effects of debt in an economy is to look at the stock of debt relative to
A) the total budget. B) GDP. C) total government spending. D) federal tax revenue.
Two brands of water, Natural Water and Mountain Water, are close substitutes. If the price of Mountain Water decreases, the fall in price
A) shifts the demand curve for Natural Water rightward. B) shifts the demand curve for Natural Water leftward. C) increases the price of Natural Water. D) increases the demand for Mountain Water. E) More information is needed to determine if the demand curve for Natural Water shifts rightward or leftward.
Which of the following is a feature of experiments?
A) Experiments are restricted to laboratories. B) Experiments are carried out only in the study of economics. C) Experiments help determine cause and effect between variables. D) Experiments require the division of participants into a treatment group and a test group.
A nation's domestic investment is greater than its savings. Which of the following is correct?
a. This nation has a negative net capital outflow. b. This nation has a trade surplus. c. Purchases of foreign assets by domestic residents exceed purchases of domestic assets by foreigners. d. All of the above are correct.