Black-market prices are below equilibrium prices because sellers want to sell large quantities
a. True
b. False
Indicate whether the statement is true or false
False
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A hypothetical open economy has a marginal propensity to import (MPI) equal to 0.2 and a marginal propensity to consume equal to 0.7. Assume that the economy is initially in equilibrium. Refer to Scenario 10.2. What is the marginal propensity to save of this economy?
a. 0.2 b. 0.3 c. 0.7 d. 0.9 e. 0.6
As a result of the government procurement policy in the U.S.:
a. the domestic consumers are required to pay a higher price than the government for the domestically produced goods. b. the government wields the sole authority of importing goods from abroad. c. the government wields the sole authority of exporting goods. d. the government is required to buy the domestic goods if the domestic price is less than the world price. e. the government is required to sponsor research and development for the domestic firms.
Accounting profit can be calculated as
A) total revenue - explicit costs. B) total revenue - implicit costs. C) total revenue - explicit costs - implicit costs. D) total revenue - fixed costs.
Suppose policy makers want to increase Y and keep NX constant. Which of the following policies would most likely achieve this?
A) an increase in government spending B) a real depreciation C) an increase in government spending and a reduction in the real exchange rate D) a reduction in the real exchange rate E) encourage the country's trading partners to implement policies that will cause an increase in foreign income (Y)