Which of the Following Has Occurred When Government Directives Do

question 117

Multiple Choice

Which of the following has occurred when government directives do not produce better economic outcomes?

• A)Government failure.
• B)Market failure.
• C)Macroeconomic failure.
• D)Scarcity.

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Definitions:

Full Employment

The situation in an economy where all who are willing and able to work at prevailing wage rates are employed, with no involuntary unemployment.

Discretionary Fiscal Policy

Involves the use of government spending and tax policies to influence the economy, based on current economic conditions and objectives.

Natural Rate

The natural rate is a concept in economics describing conditions where the economy is at equilibrium, with full employment and no inflationary or deflationary pressures.

Aggregate Supply

The aggregate amount of products and services that companies in an economy are prepared and able to offer at a specific general price level during a certain time frame.