Sources of microeconomic failure that may require government intervention include all of the following except:
A.) The abuse of market power.
B.) The need for private goods.
C.) The need for public goods.
D.) Inequities in the distribution of goods and services.
B.) The need for private goods.
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Suppose real GDP is $13 trillion and potential real GDP is $13.5 trillion. If Congress and the president increase government purchases by $500 billion, then the economy will be brought to equilibrium at potential real GDP
Indicate whether the statement is true or false
The full opportunity costs of production are calculated as the sum of both explicit and implicit costs
Indicate whether the statement is true or false
A lower interest rate makes more investment projects feasible, meaning that
a. there is a direct relationship between the rate of interest and the quantity of investment spending b. there is an inverse relationship between the rate of interest and the quantity of investment spending c. there is no relationship between the rate of interest and the quantity of investment spending d. the demand curve for investment spending is horizontal e. the demand curve for investment spending is vertical
In an open economy, gross domestic product equals $2,450 billion, consumption expenditure equals $1,390 billion, government expenditure equals $325 billion, investment equals $510 and net capital outflow equals $225 billion. What is national saving?
a. $225 billion b. $510 billion c. $735 billion d. $1,390 billion