What are market failures? Discuss examples of market failures. What can government do to improve the results of market failures?
Market failures are undesirable social results associated with free market outcomes. They include the growth of monopoly power, the presence of externalities, a lack of public goods and services, and an inequitable distribution of income. Government can intervene by enforcing anti-trust, tax or subsidize externalities, provide for public goods and redistribute income to correct for market failures.
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During an economic expansion, the demand for money ________ because ________
A) decreases; nominal GDP increases B) increases; real GDP increases C) increases; nominal GDP does not change D) does not change; people make more purchases with credit cards E) decreases; real GDP increases
The Condorcet voting paradox shows that outcomes based on dictatorial preferences do not always obey the property of transitivity
a. True b. False Indicate whether the statement is true or false