From society's point of view, the economic function of profits and losses is to:
A. promote the equal distribution of real assets and wealth.
B. achieve full employment and price level stability.
C. contribute to a more equal distribution of income.
D. reallocate resources from less desired to more desired uses.
Answer: D
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A price ceiling leads to a(n) ________ if below equilibrium price
A) increase in social well-being B) increase in producer surplus C) decrease in market demand D) decrease in total surplus
Once households pay taxes, they have two options with their disposable income: consume or save
Indicate whether the statement is true or false
If total domestic savings exceeds domestic investment, then the country will:
a. run a trade surplus. b. borrow from abroad. c. have to float its exchange rate. d. a and b.
Suppose we know that 10 Spanish Galleons sunk in the Atlantic ocean carrying approximately 50 tons of gold, but the exact location of these shipwrecks is unknown. Would this gold add to the world reserve?
A) Yes, we know it exists. B) No, we know it exists but we can't extract the gold. C) Yes, it's only a matter of time before the shipwrecks are discovered. D) No, there are no established property rights over the shipwreck so they cannot add to world reserves..