If there is a shortage of product X, and the price is free to change:
A. fewer resources will be allocated to the production of this good.
B. the price of the product will rise.
C. the price of the product will decline.
D. the supply curve will shift to the left and the demand curve to the right, eliminating the
shortage.
Answer: B
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Explain how Brazil was able to reduce the rate of inflation from 2,669 percent in 1994 to less than 10 percent in 1997?
What will be an ideal response?
If the federal government replaced the current income tax with a value-added tax
A) the prices of Treasury and municipal bonds would rise. B) the prices of Treasury and municipal bonds would fall. C) the prices of Treasury bonds would rise, while the prices of municipal bonds would fall. D) the prices of Treasury bonds would fall, while the prices of municipal bonds would rise.
Under a floating exchange rate system with mobile international capital, it is always true that current account
a. deficit + capital account surplus = trade deficit. b. surplus ? capital account surplus = trade deficit. c. surplus + capital account deficit = 0. d. surplus ? capital account surplus = 0.
Suppose there are 1000 identical wheat farmers. For each, TC = 10 + q2. Market demand is Q = 600,000 – 100p. Derive the short-run equilibrium Q, q, and p. Does the typical firm earn a short-run profit?
What will be an ideal response?