Which of the following statements is not true?
A. The United States government alters how resources are allocated in the economy by taxing, spending and issuing regulations.
B. The price mechanism will work best if there are a limited number of firms in each industry.
C. Lack of the provision of public goods is considered a market failure.
D. Not everything produced by the public sector is a public good.
B. The price mechanism will work best if there are a limited number of firms in each industry.
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
The income effect of a higher wage rate results in a
I. higher income as people work more. II. person choosing to decrease work hours as income increases. III. backward-bending labor supply curve. A) I and II B) II and III C) I and III D) II only
An increase in population shifts the production possibilities frontier inwards over time
Indicate whether the statement is true or false
Revisions in the interest rate target
a. occur on a daily basis b. have widespread impacts on the financial markets c. require Congressional approval d. are based solely on data gathered in previous quarters e. are a no-lose opportunity for the Fed