When the current price of a good is below the equilibrium price:
A. there will be excess supply.
B. buyers have an incentive to offer to pay sellers more than the current price.
C. the price will tend to stay below the equilibrium price.
D. sellers will notice their inventories are growing.
Answer: B
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On a graph with time on the horizontal axis and real GDP per capita on the vertical axis, the income levels of poorer countries are
a. diverging more from the incomes of rich countries. b. maintaining a constant gap with the incomes of richer countries. c. crossing the line representing richer countries. d. coming closer to the line representing richer countries.
Inflation is a measure of the ________ of prices; the CPI is a measure of the ________ of prices.
A. current level; rate of change in the level B. index; base year's level C. base year's level; index D. rate of change in the level; current level
What is a problem with barter that makes it so difficult to use?
A) Individuals have to produce something to trade with. B) Barter omits the store of value role for money. C) Barter requires use of only fiat money. D) Barter requires a double coincidence of wants. E) Barter is very efficient but illegal because it avoids taxation.
Last year in Candamica, consumption expenditure was $20 billion, interest, rent, and profit were $2.5 billion, government expenditure on goods and services was $7 billion,
net exports of goods and services was $5 billion, and investment was $2 billion. Hence total expenditure was A) $24.5 billion. B) $34.5 billion. C) $36.5 billion. D) $34 billion. E) undetermined without information about imports.