The basic principles of economics suggest that
a. markets are seldom, if ever, a good way to organize economic activity.
b. government should become involved in markets when trade between countries is involved.
c. government should become involved in markets when those markets fail to produce efficient or fair outcomes.
d. All of the above are correct.
c
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To maintain a functioning gold standard:
A) nations are obliged to exchange any amount of issued paper money for gold. B) paper money is not allowed; all transactions must be in coins or gold. C) the monetary authority cannot exchange currency for gold. D) care must be taken to keep inflation under 10%.
If a good has a negative income elasticity of demand, this indicates that the good is
A) normal. B) a substitute with another good. C) inferior. D) a complement with another good.