Under laissez-faire, the allocation of scarce resources among the different industries
A. is possible only with government tax and subsidy policies.
B. is accomplished by the price system.
C. requires a considerable amount of central planning.
D. is the result of consumer planning.
Answer: B
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Refer to the above table. Country A has a per capita real GDP of $1000 and B has a per capita real GDP of $10,000. A is growing at a rate of 5 percent a year and B at a rate of 4 percent a year
After 50 years, how much larger is per capita real GDP in B than A? How much is this in real dollars? A) B is 12 times larger, or $230,000 larger on a real per capita basis. B) B is 8 times larger, or $175,000 larger on a real per capita basis. C) B is a little less than 2 times smaller, or almost $20,000 smaller on a real per capita basis. D) B is a little over 6 times larger, or almost $60,000 larger on a real per capita basis.
If a bushel of wheat costs $6.40 in the United States, costs 40 pesos in Mexico, and the nominal exchange rate is 10 pesos per dollar, then the real exchange rate is
a. 1.60 b. 1.25 c. .625 d. None of the above is correct.
If the demand for a product increases, but the supply for the product stays the same, which of the following would happen?
a. There will be a scarcity of the product. b. There will be an equilibrium quantity of the product. c. There will be a shortage of the product. d. There will be a surplus of the product.
The benefits of free trade tend to be highly concentrated whereas the costs are widely scattered.
Answer the following statement true (T) or false (F)