Question

1. A strength of pure capitalism is that it promotes individual improvement, which can lead to economic growth for a nation.

Group of answer choices

True

False

2. The cornerstone of Keynesian economics is flexible wages and prices.

Group of answer choices

True

False

3. Government transfers do not involve any direct government buying; whereas, government purchases are a direct component of aggregate demand.

Group of answer choices

True

False

4. Public goods are any goods that are provided by units of local, state, or federal governments.

Group of answer choices

True

False

5. If the price of an economics textbook falls, then the supply of that economics textbook decreases, ceteris paribus.

Group of answer choices

True

False

6. The cost effect suggests that lower average prices make it more difficult to cover interest payments and other fixed costs of doing business, causing firms to cut back production.

Group of answer choices

True

False

7. Cyclical unemployment stems from an insufficient level of demand for goods/services.

Group of answer choices

True

False

Answer 1

Sol 1 : TRUE

[Capitalism is the economy where trade and other factors of market are controlled by the Private individuals without any interference of government

As, it enables the people to engage in the trade accordingly and leads to innovation and ultimately economic growth. ]

Sol 2 : TRUE

[Keynesian Economies is base on two main ideas

(i) Aggregate demand and aggregate supply

(ii) wages and prices]

Sol 3 : TRUE

[Because, government Transfers means the one side payment by the government and does not recieve anything in return , so direct purchase by the government is not an government transfer where Government purchase is an component of Aggregate demand as AD = Consumption + Investment + Government Spending + Net Exports ]

Sol 4 : FALSE

[Because , public goods means the commdoity that is provided without any benefit either by the Government or private individual ]