Having free entry and exit in a market can help drive:
A. innovation.
B. cost-cutting.
C. quality improvements.
D. All of these occur more often with free entry and exit.
D. All of these occur more often with free entry and exit.
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"When you purchase $1,000 of stock in Microsoft, your purchase is an investment and hence is part of GDP." Is this assertion correct? Explain your answer
What will be an ideal response?
Interest rates in the United States rise relative to interest rates in other countries. As a result, in the foreign exchange market
A) the supply curve of dollars shifts leftward. B) the supply curve of dollars shifts rightward. C) the demand curve for dollars shifts leftward. D) there is an upward movement along the supply curve of dollars.
Follow a $1 billion purchase of U.S. Treasury bonds by the Fed from commercial banks. Discuss the changes that occur to the balance sheet of the banking system and the balance sheet of the Fed.
What will be an ideal response?
Market failures
A) are usually caused by government interference in the economy. B) prevent the price system from attaining economic efficiency. C) encourage people to purchase more of a good than they really want. D) encourage businesses to produce more of a good than they really want to.