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.
Answer: A
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In the early stages of the 1980s banking crisis, financial institutions were especially harmed by
A) declining interest rates from late 1979 until 1981. B) the severe recession in 1981-82. C) the disinflation from mid 1980 to early 1983. D) the increase in energy prices in the early 80s.
If the economy was operating at point O (where the two axes come together), we would have an unemployment rate of ______ percent.
A. 5
B. 50
C. 95
D. 100