Price controls may be thought of as
A. a restraint on the rationing function of prices.
B. the freeing-up of free market forces.
C. useful tools that promote production.
D. necessary in market economies.
Answer: A
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John Maynard Keynes noted that
A. we could print all the money we want and still have scarcity. B. "to secure the greatest amount of pleasure with the least possible outlay should be the aim of all economic effort." C. the general notion that scarcity is due to not having enough money is an illusion. D. we could print all the money we want and still have scarcity AND the general notion that scarcity is due to not having enough money is an illusion.
In the foreign exchange market, the supply curve for dollars slopes upwards because
A) as the exchange rate rises, imports become more expensive, and more dollars are supplied to pay for the imports. B) as the exchange rate rises, imports become cheaper, and more dollars are supplied to pay for the increase in the quantity of imports. C) as the exchange rate rises, more dollars are supplied since the profit from selling dollars falls. D) supply curves always slope upwards.
In debating whether drug companies have high rates of return or moderate rates of return, economists favoring the drug industry's point of view are that those opposing it overlook one key factor that, if you ignore, leads to an overstated rate of return. It is the
A. opportunity cost of the money invested in the invention and testing of the drug. B. costs of invention. C. marketing costs. D. costs of testing.
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