How does the task of production planning happen in a laissez-faire economy?
Under laissez-faire it is the price system that apportions labor, fuel, and other inputs among different industries in accord with those industries' requirements. In a free market, inputs are assigned to the firms that can make the most productive (most profitable) use of them. Firms that cannot make a sufficiently productive use of some input will be priced out of the market for that item.
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Suppose the inflation rate has been 6 percent over the past four years. If the Federal Reserve announces an increase in the growth of the money supply, adaptive expectations would predict an inflation rate of 6 percent
a. True b. False Indicate whether the statement is true or false
Refer to the graph showing the supply of books. A shift from S0 to S1 would most likely occur for what reason?
A. A decrease in the number of suppliers in the market B. A decrease in the cost of producing books C. An increase in the price of books D. An increase in taxes levied on producers of books
Refer to the given figure where the nominal interest rate equals 6 percent and the money supply equals 600.
If the Federal Reserve wants to set the nominal interest rate at 4 percent, it must conduct open market ________ to set the money supply at ________.
A. purchases; 800 B. purchases; 200 C. sales; 200 D. sales; 800
Which of the following would NOT be considered price discrimination?
A. charging more money for long distance calls during business hours than on weekends B. giving students a discount on ski lift tickets C. charging higher rates for oil delivery to people who live farther from your business D. charging less money to wash a large luxury car than a small economy car