1. The goal of government intervention at the macro level is to:
• a. ) reduce transfer payments and lower taxes.
• b.) achieve full employment and price stability.
• c.) increase regulations on businesses to completely eliminate external costs.
• d.) encourage greater individual economic independence.
2. The tendency for the market to underproduce public goods results from:
• a.) the law of diminishing returns.
• b.) the producers are reluctant to produce something they cannot sell for a positive price.
• c.) public goods are not as important as private goods.
• d.) the law of diminishing marginal utility.