When a market is in equilibrium:
A. there is neither excess demand nor excess supply.
B. both excess demand and excess supply are positive.
C. both excess demand and excess supply are positive and equal to each other.
D. there is either excess demand or excess supply.
Answer: A
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Why has the IMF come in for widespread criticism for its handling of the Asian financial crisis?
A) It refused to make loans to any of the countries whose currencies were under speculative attack. B) Its policies did not sufficiently punish speculators with losses, giving rise to moral hazard. C) Its policies led to unsustainably low interest rates in a number of Asian countries. D) Its policies failed to lead to sufficient hardship for citizens in a number of Asian countries, giving rise to moral hazard.
According to the Gordon-Growth model, what is the value of a stock with a dividend of $2, required return on equity of 8% and expected growth rate of dividends of 4%?
A) $25 B) $26 C) $50 D) $52
Why do environmentalists worry about faster economic growth? Economists concede that faster growth is not always better. Why?
Marginal productivity theory would suggest that
A. all workers should be paid the same wage. B. higher productivity will increase the market wage of an individual. C. workers cannot do anything to improve their wage prospects for the future. D. labor demand will have no impact on the wage paid.