Answer the following statement(s) true (T) or false (F)
1. Non-equilibrium prices in the private sector often last for a long period of time.
2. A price floor is a legally established minimum price.
3. Price ceilings cause persistent surpluses.
4. Price floors set below the market clearing price distort price signals and incentives to producers and consumers.
1. False
2. True
3. False
4. False
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The CPI is a measure of the:
A. average level of prices relative to prices in the base year. B. price of a specific good or service. C. rate of inflation. D. real wage.
A meditation class meets on the second floor of a building; the first floor is a nightclub. The loud music from the club disturbs the classes. The club could be soundproofed for a cost of $5,000 or move at a cost of $8,000 . The class can't soundproof enough to overcome the music, but could be moved for $4,000 . According to Coase,
a. the club should be soundproofed so both businesses can stay open b. the club should be soundproofed because it is the one generating the externality c. the club should move rather than be soundproofed because eliminating an externality is better than compensating for it d. the class should move because it can eliminate the externality at a lower cost than can the nightclub e. whichever business has been there longer has the overriding property right; the other should adjust
The provision of loan guarantees can improve economic efficiency when
What will be an ideal response?
If the forward rate is greater than the spot rate, what are markets signaling about their expectations for the future spot rates for the home currency?
What will be an ideal response?