If you observe a market where quantity demanded doesn't equal quantity supplied, a logical conclusion is that:
A. the fallacy of composition is not operative in the market.
B. social and political forces are likely to exist.
C. the law of demand and supply do not hold in the market.
D. the invisible hand is the only force at work in the market.
Answer: B
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Which of the following statements would Milton Friedman agree with concerning the conduct of monetary policy?
A) Information lags are short, enabling the central bank to respond quickly to changes in the economy. B) There is little uncertainty over the effect of a change in the money supply on the economy. C) There are long and variable lags between monetary policy actions and their economic results. D) Wage and price adjustments are relatively slow, so changing the money supply will have a minimal impact on the real economy.
If the exchange rate between the Canadian dollar (C$) and the U.S. dollar ($) changes from 1C$ = $1.30 to 1C$ = $1.05 we can say that:
a. the U.S. dollar has depreciated with respect to all the currencies across the world. b. the Canadian dollar has appreciated with respect to the U.S. dollar. c. the U.S. dollar has appreciated with respect to the Canadian dollar. d. the Canadian dollar has depreciated with respect to all the currencies across the world. e. the Canadian dollar has appreciated with respect to all the currencies across the world.
Related to the Economics in Practice on page 318: Producers of Honest Tea stop adding sugar to their tea when the marginal utility to consumers of doing so is
A. zero. B. positive. C. negative. D. Indeterminate from the given information.
How can tax simplification be beneficial to the economy?
What will be an ideal response?