Government can play a crucial role in promoting economic efficiency by
a. taxing income
b. providing physical and institutional infrastructures
c. establishing price ceilings to help certain buyers
d. establishing price floors to help certain sellers
e. creating barriers to market entry whenever there is a threat of excessive competition
B
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Depreciation is defined as the
A) decrease in the stock of capital due to wear and tear. B) increase in the stock of capital due to investment by firms. C) increase in the stock of capital due to wear and tear. D) decrease in the stock of capital due to investment by firms.
Suppose foreigners find U.S. goods and services more desirable for some reason other than a change in the exchange rate. Which policies could be used to offset the resulting change in output?
a. an increase in the money supply and an increase in government purchases. b. an increase in the money supply and a decrease in government purchases. c. a decrease in the money supply and an increase in government purchases. d. a decrease in the money supply and a decrease in government purchases.