The term market mechanism refers to
A. The use of market prices and sales to determine resource allocation.
B. Supply curves but not demand curves.
C. The establishment of a ceiling price in a market.
D. Government laws and regulations concerning how the market should operate.
Answer: A
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In a perfectly competitive capital market, when the firm's marginal revenue product of capital exceeds the market interest rate, the
a. firm is maximizing profit b. firm should increase its quantity demanded of loanable funds c. firm should decrease its quantity demanded of loanable funds d. capital market is in equilibrium e. firm should reduce the rate of interest
Spending VCU4 on real-world goods and services causes the nation's:
a. Demand for real goods and services to rise and monetary base to remain the same. b. Demand for real goods and services to fall and M2 money supply to fall. c. Demand for real goods and services to remain the same and M2 money multiplier to fall. d. Demand for real goods and services to remain the same and M2 money supply to remain the same.
Which of the following is the best example of "what goods and services should be produced?"
a. the leasing versus the purchasing of new capital equipment b. the manufacturing of computer workstations in China or in India c. the production of SUVs versus the production of sub-compact cars d. the use of a capital intensive versus a labor intensive process of manufacturing textiles
Steel producers in the United States observe that foreign sales of U.S. steel has drastically declined due to stringent trade policies adopted by the foreign governments and unfair treatment of U.S. steel exports in foreign countries. The lobbying efforts of such loss making U.S. steel manufacturers induce the domestic government to restrict the entry of imported steel and help stimulate the
sales of domestically produced steel. Which of the following tariffs is most similar to the example mentioned above? a. A tariff imposed by the government to stimulate domestic production of a high-technology good with positive spillover effects b. A tariff imposed by the government on the import of cotton textiles because it is an infant industry in the domestic country c. An import tariff applied against a foreign monopoly supplying the domestic market d. Tariffs imposed by the government on an import competing industry that generates a negative production externality e. Reciprocal tariffs introduced by the government of a country as a call for fair trade