Under a market system of resource allocation
a. prices determine what consumers buy while the government determines what firms produce
b. prices determine what firms produce while the government determines what consumers buy
c. prices determine both what firms produce and what consumers buy
d. the government determines both what firms produce and what consumers buy
e. the government allocates resources while prices allocate goods and services
C
You might also like to view...
Refer to Figure 5-3. With insurance and a third-party payer system, what price do doctors receive for medical services?
A) $40 B) $55 C) $65 D) > $65
Suppose a perfectly competitive firm, which is initially in long-run equilibrium experiences a decrease in the wages it must pay its employees. In the short run, which of the following will occur?
A) ATC will shift up and MC will shift down, causing the firm to incur a loss. B) ATC will shift down and MC will shift up, causing the firm to earn a positive economic profit. C) ATC and MC will shift down, causing the firm to earn a positive economic profit. D) ATC and MC will shift up, causing the firm to incur a loss.
If the reserve ratio is 100-percent, then a new deposit of $1000 into a bank account
a. eventually increases the money supply by $1000. b. leaves the size of the money supply unchanged. c. eventually decreases the size of the money supply by $1000. d. eventually increases the money supply by $2000.
Suppose the central bank implements a monetary expansion in the current period and is not expected to continue this policy in the future. Explain what effect this policy will have on the shape of the yield curve and on stock prices
What will be an ideal response?