Identify two ways that the government intervenes in markets to control prices and restricts the use of individual property
What will be an ideal response?
The government can impose a price ceiling, or a maximum price that can be legally charged for a good or service. The price ceiling is set below the equilibrium price. Rent control limits price increases for rental housing. Minimum wage
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Use the following graph, which shows the supply and demand for British pounds, to answer the next question.
D1 and S1 represent the initial demand and supply curves. What will be the new equilibrium point if there is an increase in consumer spending by the British on American products and a decrease in consumer spending by Americans on British products?
A. Point J B. Point C C. Point A D. Point H
If governments promise to bail out the financial system in the event of a crisis, this creates a moral hazard problem. Describe this problem
What will be an ideal response?
The output an economy can produce with one unit of capital and one unit of labor is ________
A) indicated by the A variable in the Cobb-Douglas production function B) commonly referred to as labor productivity C) a variable that depends on how many units of capital and labor are available D) all of the above E) none of the above
A nation has an unfavorable balance of trade when
a. it has a surplus in its balance of payments b. it has a deficit in its balance of payments c. the value of its imports of goods is greater than the value of its exports of goods d. its current account is in surplus and its capital account is in deficit e. it has high tariffs