Question

1. A market economy:

a. relies on the invisible hand to coordinate supply and demand.

b. allocates according to need.

c. requires government to set prices.

d. distributes property rights.

2. A primary goal of the International Monetary Fund (IMF) is to:

a. promote economic negotiations and cooperation among industrialized countries.

b. work out repayment plans for developing countries with large international debts.

c. negotiate trade agreements between nations.

d. protect the interests of the United States abroad.

3. Some argue that Sweden's generous welfare benefits, which pay people who lose their jobs as much as 80 percent of previous incomes for three years, has resulted in too-high unemployment. This can be seen as an example of:

a. government not correcting externalities produced by the market.

b. government failure in fostering a competitive market environment.

c. market failure due to unfair conditions produced by the labor market.

d. globalization causing hardworking youth to emigrate.

Answer 1

1. A market economy relies on the invisible hand to coordinate supply and demand.

2. A primary goal of the International Monetary Fund (IMF) is to

b. work out repayment plans for developing countries with large international debts.

3. Some argue that Sweden's generous welfare benefits, which pay people who lose their jobs as much as 80 percent of previous incomes for three years, has resulted in too-high unemployment. This can be seen as an example of:

c. market failure due to unfair conditions produced by the labor market