The many layers of the federal government in the United States:
A. lead to economic inefficiencies because of difficulty aggregating and conveying
information.
B. enhance government's ability make effective decisions quickly.
C. better allow the invisible hand to direct government resources to their best uses.
D. improve accountability of government officials, thus leading to more efficient policies.
Answer: A
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If a marginal cost pricing rule is imposed on the natural monopoly in the figure above, then total surplus will be
A) $0. B) $4 million. C) $8 million. D) $16 million.
Long-run macroeconomic equilibrium occurs when
A) aggregate demand equals short-run aggregate supply and they intersect at a point on the long-run aggregate supply curve. B) structural and frictional unemployment equals zero. C) aggregate demand equals short-run aggregate supply. D) output is above potential GDP.