The price of an exhaustible resource sold in a perfectly competitive market in which technology and consumer preferences do not change over time will tend to
A. stay constant over time.
B. always equal the price of the closest substitute for that resource.
C. fall over time.
D. rise over time.
Answer: D
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The Federal Reserve focuses on the inflation rate based on the ________ rather than the CPI; to measure the underlying trend in inflation, it focuses on the ________
A) GDP deflator; overall GDP deflator B) GDP deflator; core GDP deflator C) PCE price index; core PCE price index D) PCE price index; overall PCE price index
Governments can help combat unemployment and inflation because they have the power to
a. decrease aggregate demand to attack unemployment and increase aggregate demand to attack inflation b. increase aggregate supply to attack unemployment and decrease aggregate demand to attack inflation c. increase aggregate supply to attack unemployment and decrease aggregate supply to attack inflation d. increase aggregate demand to attack unemployment and increase aggregate demand to attack inflation e. increase aggregate demand to attack unemployment and decrease aggregate demand to attack inflation
Which of the following equations is correct?
a. Y = C + I + G + NCO b. NX = NCO c. NCO = S - I d. All of the above are correct.
If you were trying to explain and predict someone’s behavior, economists would say you should find out ______.
a. what their incentives are b. how much money they make c. where they went to school d. who their relatives are