If the government sets a maximum price at which a good or service can be sold, it thereby creates
A) a price floor.
B) a black market price.
C) a price ceiling.
D) an illegal price control.
Answer: C
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The difference between an absolute price and a relative price is that:
a. absolute prices are based on costs of production, relative prices are based on market exchange. b. absolute prices are in terms of currency, relative prices are in terms of another good. c. absolute prices are in terms of another good, relative prices are in terms of currency. d. absolute prices never change, relative prices change with inflation.
Consumption spending includes spending on durable goods, nondurable goods, and services
Indicate whether the statement is true or false
The government's running of a deficit or a surplus with the objective of affecting the level of output in the economy is called:
A. sound finance. B. the Ricardian equivalence. C. fiscal policy. D. public finance.
What is dollarization?
a. ?Pegging the value of a domestic currency against the market value of gold. b. ?Pegging the value of a foreign currency against the U.S. dollar. c. ?Maintaining an acceptable exchange rate based on government intervention. d. ?Increasing the price of goods based on the supply of money. e. ?Using the dollar or some other foreign currency together with or instead of a domestic currency.