Decisions about how to allocate resources are made by:
A. governments.
B. individuals.
C. businesses.
D. Decision about resource allocation are made by all of the above
Answer: D
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Suppose the government imposes a small carbon tax on automakers. But the price of gasoline has doubled due to a Middle East crisis which has reduced oil production
In the market for autos, these changes mean that supply and demand have both changed with the effect on the demand larger than the effect on the supply. The result is that the price of autos will ________ and the number of autos sold will ________. A) rise; perhaps change but we can't say if it increases, decreases, or stays the same B) rise; increase C) rise; decrease D) fall; perhaps change but we can't say if it increases, decreases, or stays the same E) fall; decrease
Customers who have long-term relationships with banks
A) pose particular problems with respect to adverse selection. B) pose particular problems with respect to moral hazard. C) often obtain credit at a lower rate or with fewer restrictions. D) are more likely to default or violate restrictive covenants.
When a country experiences high inflation and unemployment simultaneously, which of the following problems should be addressed first?
a. High price level b. High unemployment c. Low aggregate demand d. Low aggregate supply
In the real world, we should expect the multiplier process to work itself out
A) almost instantaneously. B) within a few days. C) within about one month. D) over many months, perhaps even years.