Sometimes the response to price signals, rather than the signals themselves, may be flawed.
Answer the following statement true (T) or false (F)
True
The market may fail even when the price signals are accurate. The response to price signals, rather than the signals themselves, may be flawed. For example, there may be externalities present.
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If a tariff is imposed on imports of shrimp into the United States, U.S. producers ________ and the U.S. economy will ________
A) gain; be unaffected B) gain; lose C) lose; lose D) gain; gain E) lose; gain
What are the defining features of monetarist macroeconomics and what policies do monetarist macroeconomists recommend?
What will be an ideal response?
Refer to Price Ceiling. After the price ceiling is imposed, consumers' surplus is equal to
The following questions refer to the accompanying diagram which shows the effects of a price ceiling. The initial price and quantity are P0 and Q0, respectively, and the price ceiling is imposed at the price P1. Assume that none of the potential deadweight loss can be avoided.
a. area A.
b. area A + B.
c. area A + B + D.
d. area A + B + C + D + E + F + G.
If wages and prices are flexible, an anticipated change in the money supply has no effect on
A) money demand. B) nominal interest rates. C) real GDP. D) the inflation rate.