Government's Direct Role in the Economy Involves Its Control of the Laws

question 45

True/False

Government's direct role in the economy involves its control of the laws that specify what individuals and businesses can and cannot do.

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Definitions:

Long-run Equilibrium

A state in which all factors of production and inputs can be varied, allowing for full adjustment by firms and the economy, and no excess demand or supply exists.

Decline in Demand

A decrease in the willingness and ability of consumers to buy goods and services at existing prices, which can lead to lower market prices.

Constant-cost Industry

An industry in which the costs of production, including inputs and labor, do not change as the overall industry output changes.

Resource Prices

The cost associated with acquiring the natural resources needed for production, such as minerals, timber, water, and land.