Based on our study of market failure and government failure, the main conclusion that one should arrive at is that
What will be an ideal response?
we must carefully compare the benefits of government intervention in our markets against the costs of such intervention.
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In the two-period model with asymmetric information, a one-unit increase in the real rate of interest on bank deposits
A) causes the real loan interest rate to increase by more than one unit. B) causes the real loan interest rate to increase by less than one unit. C) cause the real loan interest rate to decrease by less than one unit. D) causes the real loan interest rate to decrease by more than one unit.
If demand is elastic and the price of a product decreases by 100 percent, then
A) the change in quantity demanded is less than 100 percent. B) the change in quantity demanded is equal to 100 percent. C) the change in quantity demanded is greater than 100 percent. D) the decrease in quantity demanded is greater than 0 percent.