If the domestic quantity supplied of a good is greater than the domestic quantity demanded, the country is likely to be a(n)
A. exporter of the good.
B. importer of the good.
C. consumer of the good.
D. importer and exporter.
Answer: A
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Use the following graph for the federal funds market to answer the next question.
A $25 billion increase in reserves will change the interest rate to ________.
A. 3.5% B. 4.0% C. 3.0% D. Undeterminable with the provided information.
In the figure above, the marginal rate of substitution (MRS) at point A is
A) greater than the MRS at any other point on the indifference curve. B) equals the MRS at all other points on the indifference curve. C) less than the MRS at any other point on the indifference curve. D) equal to the slope of the budget line.
The perfectly competitive market structure benefits consumers because
A) firms add a much smaller markup over average cost than firms in any other type of market structure. B) firms produce high-quality goods at low prices. C) firms do not produce goods at the lowest possible price in the long run. D) firms are forced by competitive pressure to be as efficient as possible.
The most likely explanation for the high inflation rates that countries like Russia and the Ukraine have suffered is that
A) large inflows of foreign funds increase the money supply, causing inflation. B) without inflation, these countries would be unable to achieve high rates of growth. C) borrowing from the central bank is the most expedient method of funding the government's expenditures. D) the flood of financial innovations has increased liquidity in these nations' economies.