Which of the following will tend to socialize losses in Privatize gains?

Government loan guarantees tend to have the effect of: socializing losses and privatizing gains.

In what way if any does the invisible hand affect government resource allocation?

In what way, if any, does the invisible hand affect government resource allocation? It does not help resource allocation, as there are no competitive forces within government that automatically direct resources to their best uses.

What are factors that impede the attainment of economic efficiency in the public sector?

Factors that impede the attainment of economic efficiency in the public sector are called: government failures. Which of the following is an activity of government that is not an activity of private firms? Enforcing involuntary transactions.

Which of the following would best explain why regulatory capture is a problem?

Which of the following would best explain why regulatory capture is a problem? The regulations implemented serve the private interests of the regulated industry, rather than addressing social interests such as consumer safety and environmental protection.

How does governments power to coerce behavior tend to reduce private sector risk?

How does government’s power to coerce behavior tend to reduce private-sector risk? By enforcing contracts and discouraging illegal behavior that threatens private property. It does not help resource allocation, as there are no competitive forces within government that automatically direct resources to their best uses.

Which of the following is an example of a supply shock?

Examples of adverse supply shocks are increases in oil prices, higher union pressures, and a drought that destroys crops. Basically, anything that drastically and immediately increases the cost of output is considered an adverse supply shock.

How does invisible hand deal with shortages?

How does invisible hand deal with shortages? The net effect, is that prices will rise until equilibrium is reached and the shortage is overcome. Therefore, over time, prices and supply will adjust until the market returns to equilibrium.

What kind of problems occur when the invisible hand isn’t working?

One of the main drawbacks of the invisible hand is that by pursuing their own self-interests, people and businesses can create external costs. Such examples include pollution or over-production such as over-fishing. This leads to costs to society which are not accounted for in the final cost of the goods.

How does the invisible hand affect the economy?

The invisible hand allows the market to reach equilibrium without government or other interventions forcing it into unnatural patterns. When supply and demand find equilibrium naturally, oversupply and shortages are avoided.

Which of the following roles does the government fulfill in the economy?

Governments provide the legal and social framework, maintain competition, provide public goods and services, redistribute income, correct for externalities, and stabilize the economy.

Which of the following topics would be of the most interest to a public choice economist?

Which one of the following topics would be of the most interest to a public choice economist? Rent-seeking behavior.

Which of the following circumstances would a principal-agent problem occur?

A principal-agent problem arises when there is a conflict of interest between the agent and the principal, which typically occurs when the agent acts solely in his/her own interests.

What causes regulatory capture?

Regulatory capture is an economic theory that regulatory agencies may come to be dominated by the interests they regulate and not by the public interest. The result is that the agency instead acts in ways that benefit the interests it is supposed to be regulating.

Which of the following is an example of regulatory capture?

The ICC is now regarded as a classic example of regulatory capture, in which regulators enact rules in favor of the regulated industry. For example, in the Transportation Act of 1920, Congress allowed the ICC to regulate minimum, not just maximum, shipping rates.

What is regulatory capture quizlet?

regulatory capture. a form of government failure in which a regulatory agency (which is supposed to represent the needs of the greater public) advances the commercial/political concerns of special interest groups w/in the sector the agency is supposed to be regulating.

Which of the following is an activity of government that is not an activity of private firms group of answer choices?

Which of the following is an activity of government that is not an activity of private firms? Enforcing involuntary transactions.

Which of the following is most closely related to recessions?

short-run fluctuations in output and employment and long-run economic growth. Which of the following is most closely related to recessions? Negative real growth in output.

Which of the following is a key difference between the economic activities of government and those of private firms quizlet?

Which of the following is a key difference between the economic activities of government and those of private firms? Government has the legal right to force people to do things; private firms do not. The government’s ability to coerce can enhance economic efficiency by: correcting market failures.