A market failure is a situation in which
A) resources are being efficiently allocated, but some companies are forced to shut down.
B) the market equilibrium leads to either too many or too few resources going towards producing the good or service.
C) the government must take actions to correct the failures of the market in a particular industry.
D) there is no free entry or exit into an industry.
B
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If both demand and supply increase, but demand increases more than supply,
a. equilibrium price will fall. b. equilibrium price will rise. c. quantity sold will decrease. d. both the equilibrium price will fall and the quantity sold will decrease.
Is the United States in danger of a sovereign default because, like countries in the euro zone, it has high current account deficits and levels of public debt?
What will be an ideal response?
Under the gold standard, if the demand for U.S. goods increased, which of the following would happen?
A) Gold would flow into the United States. B) The U.S. monetary base would decline. C) Prices in the United States would fall. D) The United States would experience a balance of trade deficit.
Which of the following statements is TRUE?
A) There is a direct relationship between investment and the interest rate. B) There is an inverse relationship between investment and the interest rate. C) There is no relationship between investment and the interest rate. D) Investment is always less than savings.