A competitive market with flexible prices and many buyers and sellers will:
A) tend to create surpluses.
B) tend to create shortages.
C) reach an equilibrium where the market clears.
D) reach and equilibrium only if a government agency sets the price.
Ans: C) reach an equilibrium where the market clears.
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Marginal utility theory predicts that a rise in the price of a banana results in
A) the demand curve for bananas shifting rightward. B) the demand curve for bananas shifting leftward. C) a movement upward along the demand curve for bananas. D) a movement downward along the demand curve for bananas.
What factors shift the demand for labor curve? Briefly describe the effect of each
What will be an ideal response?
Refer to Figure 15-6. In the figure above, if the economy is at point A, the appropriate monetary policy by the Federal Reserve would be to
A) raise income taxes. B) raise interest rates. C) lower income taxes. D) lower interest rates.
What are the effects of an expansionary monetary policy on interest rates and output in an open economy with floating exchange rates?
What will be an ideal response?