The price system features
A) exchanges made in currency only.
B) voluntary exchange that makes both the consumer and producer better off.
C) exchanges made only on a barter basis.
D) an exchange in which consumer is made better off and the producer is made worse off.
B
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A market transaction causes an externality if someone
A. directly involved in the transaction receives uncompensated benefits or costs from it. B. not directly involved in the transaction receives uncompensated benefits or costs from it. C. directly involved in the transaction seeks legal assistance to ensure that the transaction is carried out. D. not directly involved in the transaction interferes in it by imposing regulations or product standards.
According to purchasing-power parity, when a country's central bank decreases the money supply, a unit of money
a. gains value both in terms of the domestic goods and services it can buy and in terms of the foreign currency it can buy. b. gains value in terms of the domestic goods and services it can buy, but loses value in terms of the foreign currency it can buy. c. loses value in terms of the domestic goods and services it can buy, but gains value in terms of the foreign currency it can buy. d. loses value both in terms of the domestic goods and services it can buy and in terms of the foreign currency it can buy.
The less liquid markets are the:
A. smaller the supply of loanable funds, and the slower the growth in the economy. B. larger the supply of loanable funds, and the slower the growth in the economy. C. larger the supply of loanable funds, and the faster the growth in the economy. D. smaller the supply of loanable funds, and the faster the growth in the economy.
Asset price "bubbles" are sustained price increases driven by economic fundamentals.
Answer the following statement true (T) or false (F)