Describe the international costs associated with farm price supports
What will be an ideal response?
Farm price supports create distortions of prices in world markets. Most agricultural products are marketed on a worldwide basis. Farm price supports encourage more productions than would be the case without them. This additional production tends to drive down prices on world markets and make it difficult to achieve economic efficiency within a nation and around the world. Thus, there is inefficiency (over allocation) of resources worldwide to agricultural production. The price supports also affect trade policy between nations. Nations may impose tariffs or quotas to prevent the dumping of surplus farm products on their domestic markets, thus undercutting free trade among nations.
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Which of the following statements is correct?
I. When economists derive the aggregate demand curve, they are looking at the effect of the price level on one commodity only. II. Any non-price-level change that increases total planned real spending on domestic goods shifts the AD curve to the right. A) I only B) II only C) Both I and II D) Neither I nor II
Vault cash is equal to $8 million, deposits by depository institutions at the central bank are $2 million, the monetary base is $30 million, and bank deposits are $100 million. The money multiplier is equal to
A) 2.5. B) 3.0. C) 4.0. D) 5.0.
the United States economy is operating at peak efficiency, it is on its ___________________________.
Fill in the blank(s) with the appropriate word(s).
The following data give the dates of successive turning points in U.S. economic activity and the corresponding levels of real GDP at the time.Turning PointDateReal GDP (1996 $ billions)(A)July 19531992.2(B)May 19541941.0(C)Apr. 19572182.7(D)Apr. 19582117.4(E)Apr. 19602391.0 Which of the turning points are peaks?
A. (A), (B), and (C) B. (A), (C), and (E) C. (B) and (D) D. (C), (D), and (E)