The theory of public choice examines
A. The role of self-interest in public decisions.
B. How to apply cost-benefit analysis.
C. The optimal government intervention to correct market failures.
D. How a policy of laissez faire works to allocate resources.
Answer: A
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A pure monopoly may generate economic profits because ________.
A. marginal revenue is constant as sales increase B. of barriers to entry C. of rising average fixed costs D. of advertising
When the reserve requirement is decreased, the excess reserves of member banks are ________.
A. reduced, but the multiple by which the commercial banking system can lend is unaffected B. reduced and the multiple by which the commercial banking system can lend is increased C. increased and the multiple by which the commercial banking system can lend is reduced D. increased and the multiple by which the commercial banking system can lend is increased
The slope of the consumption function is equal to
A) the change in national income divided by the change in consumption. B) the change in disposable income divided by the change in consumption. C) the change in consumption divided by the change in personal income. D) the change in consumption divided by the change in disposable income.
Suppose that in 2011 nominal GDP increased and real GDP decreased relative to the year 2010 . It can be concluded that:
a. the economy experienced inflation and the total production of goods and services increased. b. the economy experienced deflation and the total production of goods and services increased. c. the economy experienced inflation and the total production of goods and services decreased. d. the economy experienced deflation and the total production of goods and services decreased.