When the government sets a price floor which is below the equilibrium price
A) a surplus will develop.
B) a shortage will develop.
C) the equilibrium price will be maintained.
D) a price ceiling will follow.
C
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Net benefits of an alternative equal:
A) benefits minus costs. B) benefits divided by costs. C) the sum of benefits and costs. D) the product of benefits and costs.
If Americans decide to buy more South African diamonds, what is the effect in the exchange market? a. It will increase the supply of U.S. dollars
b. It will decrease the supply of U.S. dollars. c. It will increase the demand for U.S. dollars. d. It will decrease the demand for U.S. dollars.
The main reason(s) monopolies can earn positive profits for a while is(are)
a. assets cannot quickly move in and out of the industry when demand fluctuates b. an increase in demand does not lead to entry of firms to absorb the extra demand c. both A&B d. none of the above
Deficits and surpluses in the balance of payments are eliminated by ____ in a pure flexible exchange rate system
a. the market mechanism b. financial borrowings c. reserve movements d. changes in fiscal and monetary policies