A. monetary policy is ineffective. B. the government is unable to find willing lenders so it can continue borrowing. C. it can only be solved with a fiscal stimulus of lower taxes and more government spending. D. other countries will be unwilling
to buy goods and services from the nation.
A. differs from the marketplace in that voters and congressional representatives often face
limited and bundled choices.
B. is less prone to failure than is the marketplace.
C. is a much fairer way to allocate society's scarce resources than is the impersonal
marketplace, which is dominated by high-income consumers.
D. involves logrolling, which is always inefficient.
Answer: A
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If the price elasticity of demand is less than 1, a monopoly's
A) total revenue increases when the firm lowers its price. B) total revenue decreases when the firm lowers its price. C) marginal revenue is undefined. D) marginal revenue is zero.
"Because chips and salsa are complements, an increase in the price of chips will cause the demand for salsa to decrease
This initial shift in demand for chips results in a higher price for chips; this higher price will cause the demand curve for chips to shift to the right." Which of the following correctly comments on this statement? A) The statement is false because one cannot assume that chips and salsa are complements for all consumers. B) The statement is false because a change in the price of chips would not change the demand for chips. C) The statement will be true if consumer tastes for chips and salsa do not change. D) The statement is false because salsa is an inferior good; chips are normal goods.