The most fundamental function of prices in a market economy is to provide
A. Information about the relative scarcities of resources and goods and services.
B. The data necessary to calculate rates of inflation.
C. The basis for the calculation of sales tax.
D. Maximum profits to producers.
Answer: A
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A barter economy is different from a money economy in that a barter economy
A. encourages specialization and division of labor B. involves higher costs for each transaction C. eliminates the need for a double coincidence of wants D. has only a few assets that serve as a medium of exchange E. promotes market exchanges
In the short run, open-market sales
a. increase the price level and real GDP. b. decrease the price level and real GDP. c. increases the price level and decreases real GDP. d. decreases the price level and increases real GDP.
According to the World View excerpt that compares GDP figures for several nations, Japan's real GDP is approximately
A. More than that of China. B. More than that of Germany. C. Second only to that of the United States. D. All of the choices are correct.
Alan could most directly apply the principles of economic decision making with respect to his job when:
A. deciding which girl to marry. B. deciding how to spend his paycheck. C. deciding which route on his way to work is the most scenic. D. deciding what to have for dinner after a long day at work.