In a market system, which component conveys information about what is relatively scarce and what is relatively abundant?
A) the number of producers
B) the number of consumers
C) prices
D) the amount of government regulation
C
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The "police power" of government to control business
(a) was exercised during the colonial period but lapsed when the Constitution was written. (b) was exercised during the colonial period and carried over to the new nation; it still exists today. (c) was not widely exercised during the colonial period but assumed greater importance in the new nation. (d) was important in England but was never important in the Americas, either before or after the Revolution.
While trade restrictions for a small country do provide gains to certain segments in the economy, in a second-best world such restrictions will always lower national welfare for a small country.
Answer the following statement true (T) or false (F)
In 1929, the CPI equaled 0.171 and in 1930, the CPI equaled 0.167. These data provide evidence of a period of:
A. trade deficit. B. expansion. C. deflation. D. inflation.
Suppose the economy is initially experiencing a recessionary gap. A reduction in the size of the budget deficit will cause which of the following in the short run?
A) a reduction in the size of the recessionary gap and increase in real GDP. B) an increase in the size of the recessionary gap and decrease in real GDP. C) an increase in inflation and increase in aggregate supply. D) an inflationary gap.