The concept of purchasing power parity illustrates the relationship between the national price levels and exchange rates in the long-run.
Answer the following statement true (T) or false (F)
True
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Fiscal policy
A) uses the tool of interest rates to stimulate private savings. B) uses the tools of taxation and spending in an effort to address inflation and unemployment. C) uses the tool of the exchange rate to discourage imports. D) uses the tool of business regulation to increase economic efficiency.
Resource demand has grown over time:
A. because of population growth only. B. because of increased consumption per person only. C. because of both increased population and greater consumption per person. D. despite decreases in population and consumption per person.
When an external cost exists that is NOT taken into account in the production of a product,
A) the level of output is too low, and the supply curve should shift to the right to account for the externality. B) the level of output is optimal, and there should be no change in the supply curve. C) the price of the product is too high, and production should be expanded to lower the price. D) the level of output is too high, and the supply curve should shift to the left to account for the externality.
All of the following are ground rules government can establish to help markets function well except
A) competition. B) honesty. C) information. D) collusion.