Answer the following questions true (T) or false (F)
1. Prior to the 1930s, the majority of dollars spent by government was spent at the state and local levels.
2. Expansionary fiscal policy involves increasing government purchases or increasing taxes.
3. Contractionary fiscal policy is used to decrease aggregate demand in an attempt to fight rising inflation.
1. TRUE
2. FALSE
3. TRUE
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Which of the following is the best example of a transactions cost?
A) the value of the time spent negotiating a contract B) the price of a new set of tires C) the cost associated with producing a golf club D) the price of labor and materials used to produce a house E) the price of food
What is the barrier to entry in a monopoly?
a. There is no barrier; anyone can enter the market. b. It a minor barrier; some can enter the market. c. It varies from industry to industry. d. It is a complete barrier; no entry is allowed.