When resource markets are free to adjust, temporary differentials will cause
a. b, c, and e to occur
b. the allocation of fewer resources to lower-paid uses
c. the equalization of payments for the same resource in different uses
d. no change in the allocation of resources
e. the allocation of more resources to higher-paid uses
A
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In August 1971, President Nixon implemented price and wage controls to combat inflation. Which of the following statements best describes the change in price levels after the price controls policy was implemented?
a. Inflation remained almost the same for many years. b. The rate of inflation decreased and remained around 3 percent throughout 1972. c.. The rate of change in prices fell below zero in mid-1970s. d. Implementation of controls led to an increase in inflation rates in 1972.
Productive activity in the underground economy:
a. results in an overstatement of actual income and production in the national accounting system. b. consists of unrecorded cash transactions. c. is estimated and included in the national income accounting system. d. poses no problem for the measurement of gross domestic product. e. does not affect GDP but is included in the value-added computations.
To an economist, individuals are acting "rationally" if they are striving to do their best to achieve their goals
a. True b. False Indicate whether the statement is true or false
During the Great Depression in the early 1930s,
a. bank runs closed many banks. b. the money supply rose sharply. c. the Fed decreased reserve requirements. d. both a and b are correct.