What is the diamond-water paradox?
What will be an ideal response?
The diamond-water paradox is a paradox stating that (1) the things with the greatest value in use frequently have little or no value in exchange, and (2) the things with the greatest value in exchange often have little or no value in use.
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As inflation increases, households become ________ uncertain leading to ________ spending.
A. more; more B. less; less C. more; less D. less; more
The Fed and Treasury took action to restore the flow of funds from savers to borrowers in order to encourage all of the following EXCEPT:
A) increase the return to savers B) enable households to purchase durable goods C) increase the likelihood of purchases of houses D) allow firms to finance purchases of structures and equipment
One of the reasons that communism failed in the Soviet Union is that, under communism:
a. no one had property rights, so there was little incentive to use resources efficiently. b. there were high rates of unemployment and homelessness accompanied by a high rate of inflation. c. planners did not have all the information necessary to make efficient decisions. d. there was a high degree of political freedom. e. there was a high degree of economic freedom.
According to the foreign trade effect, when the U.S. price level decreases, U.S. consumers are likely to buy
a. less of all products, both American made and foreign made b. more American-made products c. more foreign-made products d. different American-made products