Which of the following is TRUE?
A) When a market price allocates resources, everyone who is able to pay the price gets the resource.
B) A command system works well when the lines of authority and responsibility are clear.
C) When the government decides how to allocate tax dollars among competing uses, resources are allocated by command.
D) When a manager offers everyone in the company the opportunity to win a prize, resources are allocated by a market price.
B
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The country of Epsilon has continuous strong economic growth and a steady price level. This situation is most likely the result of aggregate demand growing ________ aggregate supply
A) at the same pace as long-run B) slower than long-run C) slower than short-run D) faster than long-run
To close an inflationary gap, the government will
a. run budget deficits b. decrease taxes, leaving government spending unchanged c. increase both taxes and government spending d. run budget surpluses e. legislate a reduction in the rate of inflation