When a shortage exists in a market
A. the market clearing price is above equilibrium and market forces will cause the price to fall.
B. the quantity supplied is greater than the quantity demanded at the current price.
C. the quantity demanded is less than the quantity supplied at the existing price.
D. the current price is below the market clearing price and the price will rise.
Answer: D
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When the opportunity cost of producing carrots increases as more carrots are produced, then:
a. no more carrots will be produced. b. resources are equally suited to the production of carrots and to other goods. c. the production possibilities curve is a straight line. d. the production possibilities curve becomes positively sloped. e. the law of increasing costs is present.
GDP is a measure of:
a. domestic production. b. changes in the general level of prices. c. material well-being. d. social welfare.
Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and nominal value of the domestic currency falls. b. The GDP Price Index falls, and nominal value of the domestic currency rises. c. The GDP Price Index falls, and nominal value of the domestic currency remains the same. d. The GDP Price Index rises, and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
China currently has a policy to subsidize grain production to keep farmers' income up. It sets a target price for the state purchase of the grains. Currently the price is higher than the world price. China's policy has led to:
a. Increases in the domestic stocks of grain b. Decreases in the state purchases of grain c. Shortages of grain in China d. Reduction of imported grain for the use in livestock feed e. a and d