Central planners in command economies
a. generally set production targets for firms.
b. always consult consumers on the output of goods they want to consume.
c. allow prices to organize the economy's production.
d. depend upon the invisible hand to coordinate economic activities.
a
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Though useful, purchasing power parity does not completely explain long-run movements in exchange rates due to
A) some goods being nontradeable. B) changes in the real exchange rate. C) differentiated products. D) all of the above.
The welfare cost of taxation _____
a. occurs because individuals try to avoid the tax to some degree b. is not the same thing as the excess burden of taxation c. occurs because individuals refuse to pay the tax d. cannot, in theory, be calculated
The problem of double counting when calculating GDP is solved by
a. subtracting imports from exports b. counting only goods, not services c. summing total sales receipts of all firms d. summing only the value added by each firm e. using the capital consumption allowance
If there is a shortage of loanable funds, then
a. the quantity demanded is greater than the quantity supplied and the interest rate will rise. b. the quantity demanded is greater than the quantity supplied and the interest rate will fall. c. the quantity supplied is greater than the quantity demanded and the interest rate will rise. d. the quantity supplied is greater than the quantity demanded and the interest rate will fall.