Which of the following statements is true of the world price of a good?
A) It is determined by the World Bank.
B) It is determined by the intersection of the world supply and world demand curves for the good.
C) It is always less than the domestic price of the good in the country that exports the good.
D) It is always greater than the domestic price of the good in the country that imports the good.
B
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Marvin loves chocolate truffles. As the price of a chocolate truffle increases from $1 to $2 to $3, Marvin continues to buy a dozen chocolate truffles every week. Marvin's demand for chocolate truffles is ________
A) elastic B) unit elastic C) illustrated by a horizontal demand curve D) perfectly inelastic
Absorption refers to
A) the total amount of imports purchased by a country. B) the net amount of imports purchased by a country. C) total spending by domestic residents, businesses, and governments. D) GDP less desired consumption, desired investment, and government purchases.
A large country imposes capital controls that prohibit foreign borrowing and lending by domestic residents. The country is currently running a financial account surplus. The imposition of the capital controls will cause
A) net exports to decrease. B) real domestic interest rates to rise. C) real world interest rates to rise. D) desired national saving to fall.
The price system automatically leads to an efficient allocation of inputs among the different production processes
a. True b. False Indicate whether the statement is true or false