Points A, B, and C in Figure 2-8 indicate consumption and investment for three economies. Other things constant, which of the economies is likely to grow more rapidly in the future?
a. economy A
b. economy B
c. economy C
d. They would all be expected to grow at the same rate.
d. They would all be expected to grow at the same rate.
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Suppose a country's net exports equal -$2.1 billion. Which of the following will happen if the volume of exports increases by $3 billion without any change in the volume of imports?
A) The country's net exports will stand at -$5.1 billion. B) The country's net exports will stand at zero. C) The country's net exports will stand at -$0.9 billion. D) The country's net exports will become positive.
In the bond market, the market equilibrium shows the market-clearing ________ and market-clearing ________
A) price; deposit B) interest rate; deposit C) price; interest rate D) interest rate; premium
What would happen in a free market system when production of a good generates negative externalities?
A) There is a shortage of the good. B) There is a surplus of the good. C) The equilibrium quantity of the good is less than the efficient amount. D) The equilibrium quantity of the good is more than the efficient amount.
Answer the following statements true (T) or false (F)
1. The fundamental economic question regarding the distribution of output in the economy is equivalent to the question of who will produce the output. 2. The concept of consumer sovereignty refers to the situation where consumers have the right to vote for the board of directors of large corporations. 3. In analyzing a market system, economists often assume that firms will choose the production techniques that will give them the maximum revenues. 4. Economic efficiency entails producing a certain output with the minimum number of units of inputs.