What is the relationship between scarcity and shortage, as economists use the terms?
A) Scarcity and shortage cannot exist simultaneously.
B) Shortages are the basic cause of scarcity.
C) Scarcity creates shortages in the long run.
D) Scarcity is relative while shortages are absolute.
E) Scarcity is unavoidable but shortages are not.
E
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The government budget deficit must be equal to the surplus
a. of saving over investment. b. in the current account in international trade. c. of saving over consumption. d. of saving over investment plus the trade deficit.
Which is considered a strength of monetary policy compared to fiscal policy?
What will be an ideal response?
Figure 4.4 illustrates the supply of tacos. An increase in the supply of tacos is represented by a movement from:
A. point a to point b. B. point c to point b. C. S2 to S1. D. S0 to S1.
Which of the following is an advantage of fixing exchange rates?
A. making the prices of foreign goods more flexible in the domestic market B. making residents more mobile across countries C. limiting foreign exchange risk D. eliminating trade deficits