When the "invisible hand" guides economic activity, prices of products reflect
a. only the values that society places on those products.
b. only the costs to society of producing those products.
c. both the values that society places on those products and the costs to society of producing those products.
d. none of the above; when the "invisible hand" guides economic activity, prices of products are set by the government in a manner that is thought to be "fair."
c
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
If the number of firms producing electric cars increases and consumer preference for electric cars increases, the equilibrium quantity of electric cars will definitely increase
Indicate whether the statement is true or false
William and Jamal live in the country of Dumexia. As a result of Dumexia's legalization of international trade in bananas, William becomes better off and Jamal becomes worse off. It follows that William is a seller, and Jamal is a buyer, of bananas
a. True b. False Indicate whether the statement is true or false
You can generally distinguish an aggregate supply-caused recession from an aggregate demand-caused recession because
A. real GDP will rise in an aggregate supply recession. B. the price level will fall in an aggregate supply recession. C. the price level will fall in an aggregate demand recession. D. real GDP will rise in an aggregate demand recession.