In a market economy, supply and demand determine
a. both the quantity of each good produced and the price at which it is sold.
b. the quantity of each good produced but not the price at which it is sold.
c. the price at which each good is sold but not the quantity of each good produced.
d. neither the quantity of each good produced nor the price at which it is sold.
a
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A demand curve shows the relationship between price and quantity demanded only so long as all other things are held constant.
Answer the following statement true (T) or false (F)
To affect the market outcome, a price ceiling
A) must be set below the equilibrium price. B) must be set below the legal price. C) must be set below the price floor. D) must be set below the black market price.
Which of the following identities describe the equation of exchange?
a. Money in circulation × prices = velocity × income b. Money in circulation × income = velocity × prices c. Real GDP = money in circulation × velocity d. Nominal GDP = money in circulation × velocity e. Real GDP = prices × money in circulation × velocity
An open economy is one in which exports and imports constitute a large share of GDP
a. True b. False Indicate whether the statement is true or false