Part $1.$ True and False $(1$ point each$)$

Pollution is an example of a market failure.

Increasing opportunity costs are an indication of inefficiency in using resources.

Government intervention in the market place is never justified in a capitalist society.

People are willing to buy additional quantities of goods only if the price falls.

Public goods are those which can not be consumed exclusively.

Public goods, externalities, market power and inequitable distribution are flaws in the market which deter the achievement of the optimal mix of output.

Autonomous investment means that investment is not dependent on current income.

If full employment output is greater than desired spending at full employment, then there is an inflationary gap.

If there is a recessionary gap, inventories will accumulate.

Demand$-$pull inflation results from the inflationary gap.

Equilibrium GDP is always the most desired level of GDP for the economy.

Ceteris paribus assumes that every thing is changing.

The Federal Reserve is responsible for implementing monetary policy.

Everyone seeks a free ride.

A leftward shift in the supply curve is the same as an increase in supply.

The laws of supply and demand are not related to scarcity.

Market generated distribution of income may be unfair.

Market generated distribution of income is never unfair.

A shift in the demand curve happens when the determinants of demand change.

Movement along the demand curve happens when the determinants of demand change.

The law of supply represents a positive relationship between price and quantity supplied.

Over half the federal budget is made up of transfer payments.

State and local governments account for more of the GDP consumption than the federal government.

Allocation decisions within the public sector may be based on cost$-$benefit analysis or on votes.

Imports are subtracted from exports to obtain net exports.

New goods and services originating in the US are measured by per capita GDP$.$

A command economy is consistent with the market mechanism

Keynes said that: $"$in the long run we are all dead".

The US produces commodities, goods, services, and experiences.

$30$ Lowering the interest rate is an exercise of Fiscal Policy.