What would happen in an economy if total planned production exceeded total planned real expenditures?
A. Inventories would accumulate, and firms would tend to lower prices.
B. Inventories would be depleted, and firms would tend to raise prices.
C. Inventories would accumulate, and firms would tend to raise prices.
D. Inventories would be depleted, and firms would tend to lower prices.
Answer: A
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The most commonly used measures of elasticity are
A. income elasticity of demand and price elasticity of supply. B. price elasticity of demand and price elasticity of supply. C. cross-price elasticity of demand and cross-price elasticity of supply. D. price elasticity of demand and cross-price elasticity of supply.
Suppose we observe an economy experience an economic expansion and high inflation. This means the expansion is attributed to
a. growth in aggregate demand. b. growth in aggregate supply. c. a reduction in aggregate demand. d. a reduction in aggregate supply.
Increasing opportunity cost along a bowed-out production possibilities frontier occurs because
A) of inefficient production. B) of ineffective management by entrepreneurs. C) some factors of production are not equally suited to producing both goods or services. D) of the scarcity of factors of production.
The government's role in a developing country is important during the country's development process because building social overhead capital
A. requires a joint venture between the public and private sectors. B. can only be financed by the private sector. C. cannot be taken on by the private sector. D. can only be achieved in a developing country.