To promote economic efficiency, government should
A. keep all prices as low as possible.
B. keep all prices high so that people will save more money.
C. allow the market to set low prices for abundant goods and high prices for scarce goods.
D. never interfere with firms’ price setting powers.
Answer: C
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If interest rates in the U.S. are higher than elsewhere, it will cause
a. the demand for dollars to decrease b. the supply of dollars to increase c. the exchange value of the dollar in relation to other currencies to fall d. the dollar to depreciate e. the demand for dollars to increase
For what kinds of goods are buyers most likely to seek additional information about quality?
What will be an ideal response?
 Figure 18.2Refer to Figure 18.2. In autarky, the maximum amount of fishing poles that Macadamia can produce is:
A. 40. B. 100. C. 120. D. 160.
The exchange rate is volatile because
A) the demand curve and the supply curve are horizontal. B) when a relevant factor changes, demand and supply tend to change in opposite directions. C) the demand curve is vertical. D) the supply curve is vertical. E) when a relevant factor changes, demand and supply tend to change in the same direction.