Explain the study of economics
What will be an ideal response?
Economics is the study of how people allocate their limited resources in an attempt to satisfy their unlimited wants. Because of this contrast between limited resources and unlimited wants, economics is the study of how people make choices.
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The Arrow impossibility theorem explains
A) why government regulation of private markets will always result in a reduction in economic efficiency in these markets. B) why voters are always rationally ignorant. C) why there is no system of voting that will consistently represent the underlying preferences of voters. D) why it is not possible to provide the economically efficient amount of any public good.
The largest component of GDP is
a. tax revenue b. government purchases of goods and services c. the nation's capital stock d. private investment spending e. private consumption expenditures