In the circular-flow diagram, factors of production include land, labor, and capital
a. True
b. False
Indicate whether the statement is true or false
True
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If a positive externality exists, __________ in order for the socially optimal output to be reached.
A. supply needs to decrease B. demand needs to increase C. demand needs to decrease D. a and c E. none of the above
The Condorcet voting paradox demonstrates that democratic outcomes do not always obey the property of
a. narrowness of preferences. b. concavity of preferences. c. asymmetry of preferences. d. transitivity of preferences.
An inflation rate above the target rate will result in:
A. a movement up along the monetary policy reaction curve and a rightward shift of the dynamic aggregate demand curve. B. a movement up along the monetary policy reaction curve and a leftward shift of the dynamic aggregate demand curve. C. a movement up along the monetary policy reaction curve and a movement up the dynamic aggregate demand curve. D. a movement down along the monetary policy reaction curve and a movement down the dynamic aggregate demand curve.
If the fundamental value of the nominal exchange rate equals 0.20 U.S. dollars per franc, but the franc is officially fixed at 0.15 U.S. dollars per franc, then the franc exchange rate is ________ and to maintain this exchange rate there will be ________ in the government's stock of international reserves.
A. undervalued; a net increase B. undervalued; a net decline C. overvalued; a net increase D. overvalued; a net decline