A black market develops only when quantity demanded exceeds quantity supplied.
Answer the following statement true (T) or false (F)
True
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The balance of payments accounts are divided into two sections: the current account and the financial account
Indicate whether the statement is true or false
An organization of sellers designed to coordinate their supply decisions to maximize joint profits is called a:
a. consumer cooperative. b. marketing association. c. regulatory agency. d. cartel.
Specialization of labor means that: a. production requires a special kind of labor
b. the overall skill level of labor is increasing over time. c. individuals produce goods that they are relatively good at producing and trade for those that they do not produce. d. individuals achieve self-sufficiency in production by producing all the goods that they require. e. exchange within the economy consists of trading in services.
Which of the following best describes an adjustable rate mortgage (ARM)?
a. With an ARM, the borrower is protected against the risk that higher inflation will reduce the real loan payments, and so the risk premium part of the interest rate can be correspondingly lower. b. With an ARM, the borrower is protected against the risk that higher inflation will reduce the real loan payments, and so the risk premium part of the interest rate can be correspondingly higher. c. With an ARM, the lender is protected against the risk that higher inflation will reduce the real loan payments, and so the risk premium part of the interest rate can be correspondingly lower. d. With an ARM, the lender is protected against the risk that higher inflation will reduce the real loan payments, and so the risk premium part of the interest rate can be correspondingly higher.