Economists often say that trade is a win–win situation. How do you justify this?
What will be an ideal response?
One of the fundamental ideas of economics is that both the parties must expect to gain something in voluntary exchange. Laws sometimes prohibit mutually beneficial exchanges between buyers and sellers—as when the resale of tickets to sporting events is outlawed even though the buyer is happy to get the ticket that he could not obtain at a lower price. In such instances, misguided reasoning blocks the mutual gains that arise from voluntary exchange. No one will voluntarily agree for a trade if they do not expect any benefit from it. So trade is a win–win situation since both parties are going to gain from it.
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Government stabilization policy
A. cannot influence investment spending. B. can stimulate aggregate demand and thereby induce businesses to invest, but the amount is not totally predictable. C. can stimulate aggregate demand, but investment spending will not be affected. D. can stimulate aggregate demand, but only in the long run.
Explain whether you would expect the elasticity of supply to be highly elastic or inelastic for fresh cut flowers and why
What will be an ideal response?
Consider the following sequence of events: price level ? ? demand for money ? ? equilibrium interest rate ? ? quantity of goods and services demanded ? ?his sequence explains why the
a. money-supply curve is vertical. b. aggregate-demand curve shifts leftward in response to a monetary injection. c. aggregate-demand curve shifts rightward in response to a monetary injection. d. aggregate-demand curve slopes downward.
The addition of imports reduces the value of the multiplier.
Answer the following statement true (T) or false (F)