How does a market system prevent people from getting as many goods and services as they wish?
A) In a market system, firms can charge any price they want, thus preventing poor people from getting as many goods and services as they wish.
B) Governments interfere with the market mechanism to influence the allocation of goods and services.
C) The market system allocates goods and services to those who are able to pay for those products and therefore income is a limiting factor.
D) The government imposes taxes on those who earn beyond a certain amount of income.
C
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A criticism of the monetarist autonomous spending variable is that
A) some types of autonomous spending do not affect aggregate demand. B) some types of autonomous spending affect aggregate demand before the spending occurs. Some types of autonomous spending affect aggregate demand when they occur. C) some types of autonomous spending affect aggregate demand only long after they occur. D) Keynesians do not think that autonomous spending affects aggregate demand.
Based on our understanding of the model presented in Chapter 3, we know with certainty that an equal and simultaneous increase in G and T will cause
A) an increase in output. B) no change in output. C) a reduction in output. D) an increase in investment.