In a market economy, ________ interact in markets to decide the answers to the fundamental economic questions
A) state and local governments
B) large corporations
C) households and firms
D) the judicial and legislative branches of the federal government
Answer: C
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The infant-industry argument is the only perfectly valid argument for protection
Indicate whether the statement is true or false
If aggregate expenditures are lower than real GDP:
A. actual real output is less than equilibrium real output. B. aggregate output increases. C. employment increases. D. there will be unplanned increases in inventories.
The income that people earn in resource or factor markets is called:
a. disposable personal income. b. transfer payments. c. national income. d. personal income.
Securitization is the process by which financial institutions
A) pool together a group of loans and then issue securities backed by the pool. B) determine the composition of their assets that will yield the optimal amount of security for their financial health. C) borrow funds from the Federal Reserve and then use those funds to make loans to their customers. D) determine sub-prime mortgage rates.