Which of the following statements is true?
A) The command system is remarkable at providing price signals that guide resources in a way that maximizes social surplus.
B) Market economies minimize waste and provide incentives to all market participants to promote their own interests.
C) Coordination of different economic agents and bringing them together to trade is a central problem of a free market economy.
D) The broader interests of societies are met more often under a command system in comparison to a market system.
B
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If demand pull inflation occurs when the economy is already at potential GDP, then following the initial increase in aggregate demand, the
A) AS curve shifts rightward. B) potential GDP line shifts rightward. C) AS curve shifts leftward. D) potential GDP line shifts leftward. E) None of the above is correct because demand-pull inflation shifts only the aggregate demand curve.
Which of the following is a reason people choose to hold more cash?
a) Interest rates paid on savings and checking accounts at the bank rise dramatically. b) Consumers have more faith in the stability and safety of the financial system. c) Interest rates paid on savings and checking accounts at the bank are near zero. d) Holding cash becomes less convenient.
The rate of interest that you pay on a home loan depends upon all of the following EXCEPT
A. the supply of houses in the real estate market. B. your credit rating. C. handling charges or loan fees. D. the length of the loan.
The largest proportion of the public debt is held by:
A) U.S. government agencies B) foreign individuals and institutions. C) the Federal Reserve System. D) the U.S. Treasury.