In the 1980s, one of the most common sights in the socialist countries, such as the former Soviet Union and North Korea, were long lines for bread, sugar, and other necessities. These countries had price ceilings on these necessities

Some of the socialist nations, such as the former Soviet Union, have moved to a market economy by lifting the price ceilings, while others, such as North Korea, have retained their price ceilings. What prediction do you make about the presence (or absence) of long lines today in the former Soviet Union and North Korea? Explain your answer.


The long lines have disappeared in the former Soviet Union but are still present in North Korea. The socialist countries had price ceilings on necessities that were below the equilibrium price. These ceilings created shortages, thus the long lines. In the countries that have lifted the price ceilings, the price has risen toward the equilibrium price, thereby eliminating the shortages and long lines. In the nations that have retained the price ceilings, the shortages and hence the long lines have persisted.

Economics

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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. 19602391.0The economy experienced an expansion that lasted from:

A. May 1954 to April 1958. B. July 1953 to May 1954. C. July 1953 to April 1957. D. May 1954 to April 1957.

Economics

A depreciation is

A) a decrease in the trade deficit. B) a decrease in the value of currency. C) an increase in the trade surplus. D) an increase in the value of currency.

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The crowding-out effect indicates that budget deficits

a. will stimulate aggregate demand and, therefore, exert a strong impact on output and employment. b. will lead to additional borrowing and higher interest rates that will reduce the level of private spending. c. are highly appropriate when the threat of inflation is present. d. are highly appropriate when the threat of recession is present.

Economics

What are the terms of exchange and how are these terms related to the price?

What will be an ideal response?

Economics