Which of the following is not a function of prices in a market system?
a. Prices have the crucial job of balancing supply and demand.
b. Prices send signals to buyers and sellers to help them make rational economic decisions.
c. Prices coordinate economic activity.
d. Prices ensure an equal distribution of goods and services among consumers.
d
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Business cycles disappear when firms
A) hold nominal wages constant as nominal demand changes. B) hold prices constant as nominal demand changes. C) change prices proportionately with nominal demand changes. D) change wages proportionately with nominal demand changes.
If you were the Chairman of the Fed and faced a recession, you would most likely
a. encourage commercial banks to provide loans by buying government securities b. encourage commercial banks to provide loans by raising the discount rate c. encourage commercial banks to provide loans by selling government securities d. restrict commercial bank lending by selling government securities e. restrict commercial bank lending by lowering the federal funds rate
When BMW, an German company, purchases a welding machine that was made in Toronto, the purchase is
A) both a German and a Canadian import. B) a German import and a Canadian export. C) a German export and a Canadian import. D) neither an export nor an import for either country.
The slope of the budget line in the graph shown:
A. represents the relative marginal utilities from consuming the two goods. B. is the consumer's income level. C. measures the total utility the consumer gets from consuming the two goods. D. represents the opportunity cost of the two goods relative to each other.