If demand in a perfectly competitive market decreases, supply will:
A. decrease in the short run.
B. increase in the short run.
C. increase in the long run.
D. not change in the short run.
Answer: D
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When the economy is to the right of the potential GDP, what type of gap exists?
a. An unemployment gap b. A structural gap c. A recessionary gap d. An inflationary gap
Each of the following is a characteristic of socialism, except
A. prohibition of any private ownership of the means of production. B. a substantial degree of government planning. C. a large-scale redistribution of income. D. government ownership of some of the means of production.
A relative price is
A) the number of dollars that must be given up in exchange for the good. B) also called the money price. C) not an opportunity cost. D) the ratio of one price to another price.
A common argument for fixed exchange rates is that they
A) give central banks greater freedom in adjusting their economy's level of output. B) forever free the central bank from have to adjust the exchange rate to fundamental changes in the economy. C) make trade more costly, and thus encourage domestic citizens to buy domestically produced output. D) all of the above E) none of the above