In the economic way of thinking, the demand for clean air is
A) nonexistent.
B) independent of price or cost.
C) completely inelastic.
D) all of the above.
E) none of the above.
E
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The expectation of future revaluation causes a balance of payments crisis marked by
A) a sharp rise in reserves and a fall in the home interest rate below the world interest rate. B) a sharp fall in reserves and an even bigger fall in the home interest rate below the world interest rate. C) a sharp fall in reserves and a rise in the home interest rate above the world interest rate. D) a sharp rise in reserves and an even greater rise in the home interest rate above the world interest. E) a sharp fall in reserves and an unchanged home interest rate.
A point outside the production possibilities frontier
a. represents unemployment of resources b. represents full employment of resources c. would not represent an efficient combination of goods d. cannot be reached using the available technology e. is less desirable than one that lies inside the frontier
Fiscal policy most directly affects the economy by increasing or decreasing:
A. aggregate demand. B. interest rate. C. long-run aggregate supply. D. the money supply.
When new firms have an incentive to enter a competitive price-taker market, their entry will
a. increase the price of the product. b. drive down profits of existing firms in the market. c. shift the market supply curve to the left. d. increase demand for the product.