If there is a shortage in a free market, then
A. suppliers will decrease their output to match demand.
B. consumers will offer to pay a lower price for the good, and the price will fall toward the equilibrium level.
C. suppliers will accept any price below equilibrium.
D. consumers will offer to pay a higher price for the good, and the price will rise toward the equilibrium level.
Answer: D
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The current account is the sum of ________
A) net exports, net factor income from abroad and net transfers from abroad. B) consumption, investment, and government expenditure C) net exports and net investment from abroad D) net exports and net transfers from abroad
Suppose you purchase a two-year bond that has a $450 coupon and a face value of $5,000, and immediately after you purchase the bond, new bonds are issued that are otherwise identical, except they have coupons of $375
If you sell your bond, the price of your bond will be A) $4,868.07. B) $5,000.00. C) $5,069.76. D) $5,134.67.
The classical model indicates that at the equilibrium interest rate, saving is
A) equal to investment. B) greater than investment. C) unnecessary for investment. D) less than investment.
Preferred Budgets ($ in millions)567891011Number of voters (in thousands)61016201595Table 15.2Table 15.2 shows the preferred budget for a new civic center and the number of voters in a community who prefer that budget. Suppose that Jay initially proposed $6 million while David proposed $10 million. Given the distribution of voters' preferences, David can increase his chance of being elected by proposing:
A. a greater budget than $10 million. B. a smaller budget than $6 million. C. a smaller budget toward the median budget. D. None of these