Why are cooperative arrangements difficult to negotiate and maintain?
A) They require a long-term policy commitment, but politics is often focused on the short run.
B) No one understands the benefits and consequences.
C) Trading nations do not trust one another.
D) They have to be approved by the IMF, which takes years to accomplish.
Ans: A) They require a long-term policy commitment, but politics is often focused on the short run.
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A decrease in the equilibrium price for a product will result
A) when there is a decrease in demand and a decrease in the number of firms producing the product. B) when there is an increase in supply and a decrease in demand for the product. C) when the quantity demanded for the product exceeds the quantity supplied. D) when there is a decrease in supply and a decrease in demand for the product.
Taxes on alcohol and tobacco are often referred to as “______ taxes.”
a. flat b. vertical c. sin d. progressive
Consumers do NOT buy as many units of each good as they want because
A. they do not know what they want in all situations. B. of the law of diminishing marginal utility. C. they have limited incomes. D. eventually marginal utility equals zero.
Assume that the M1 multiplier is 2.5. If the Federal Reserve purchases $200 worth of government securities, the money supply will
A) rise by $200. B) rise by $500. C) fall by $200. D) fall by $500.