Which of the following is a source of government failure?
A. The invisible hand.
B. The lack of bureaucracy in government.
C. The enormous size and scope of government.
D. Excessive flexibility.
Answer: C
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If a country does not engage in trade with other countries, it is known as
A. A trade surplus economy. B. A trade deficit economy. C. An open economy. D. A closed economy.
According to Irving Fisher, velocity ________
A) is determined by institutions that affect the way individuals transact B) is affected by institutions only gradually C) is assumed constant in the short run D) all of the above E) none of the above
One way for a country to gain some monetary policy independence and provide some ability to reduce exchange-rate variability is to use
A. a managed floating exchange rate. B. a monetary union. C. a gold standard. D. a currency board.
Suppose there are only two goods (Good A and Good B) and the average person buys 4 of Good A in a year and 3 of Good B. If, in the base year, the Price of Good A is $5 and the Price of Good B is $10, and in the next year the Price of Good A is $6 and the Price of Good B is $9, the inflation that occurred in the second year is
A. 51%. B. 1%. C. 100%. D. 2%.