When a profit-maximizing firm in a competitive market experiences rising prices, it will respond with an increase in production

A decrease in government spending would cause all but one of the following to happen. Which is the exception?

a. The government's budget deficit would shrink. b. The interest rate would decrease. c. Consumption spending would increase. d. Investment spending would increase. e. Total output would decrease.

How does government's power to coerce behavior tend to reduce private-sector risk?

A. By enforcing contracts and discouraging illegal behavior that threatens private property. B. By guaranteeing that the government will financially cover any losses by private-sector firms. C. By strictly regulating the allocation of most property resources in the economy. D. The coercive power of government only increases private-sector risk.