Which of the following is a main characteristic of exchanges in the market system?
A) Decisions to trade are based on individuals' self interest.
B) Exchanges are highly regulated by the government.
C) Sellers hire economists to determine the market clearing price.
D) Exchanges are part of the legislative imperative.
A
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The government proposes a tax on imported champagne. Buyers will bear the entire burden of the tax if the
A) demand curve for imported champagne is horizontal. B) demand curve is downward sloping and the supply curve is upward sloping. C) demand curve for imported champagne is vertical. D) supply curve for imported champagne is vertical.
A cost associated with an economic depression is
a. the loss of goods and services that are not produced. b. the loss of individual income to unemployed workers. c. a possible deterioration of working skills of unemployed workers. d. All of these.
If the Fed wants to decrease the money supply, it can __________ the required reserve ratio, conduct an open market __________, or __________ the discount rate
A) raise; purchase; lower B) lower; purchase; lower C) raise; sale; raise D) lower; sale; lower E) none of the above
Refer to the following graph.
Suppose this graph represents the market for cheese. In order to keep the price of cheese at Pf, government must:
A. prevent the excess supply from reaching the market. B. devise a mechanism to ration cheese to consumers. C. cause the demand for cheese to decrease. D. cause the supply of cheese to increase.