When the market price is set above the equilibrium price:
A. the market is not efficient.
B. consumer surplus is decreased.
C. total surplus is not maximized.
D. All of these are true.
Answer: D
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Debt service is the
a. difference between merchandise exports and merchandise imports b. interest payments on investments divided by the amount of unilateral transfers c. percentage that interest payments on international debt is of a nation's exports d. difference between inflows and outflows on the country's current account e. value of a nation's merchandise exports minus the value of its merchandise imports
If restrictive monetary policy results in a slowdown in the domestic inflation rate and higher real interest rates, other things constant, the
a. nation's currency will appreciate. b. nation's currency will depreciate. c. nation will run a balance of trade surplus. d. nation will run a capital account deficit.
The production possibilities curve in Figure 2.1 illustrates the notion of:
A. increased factory goods production. B. increased agricultural production. C. diminishing resources. D. opportunity cost.
The amount of labor a firm employs depends on
A) the market wage. B) the market price for the good produced. C) Both A and B. D) None of the above.