Suppose an economy's exchange rate system is the gold standard and vast tracks of gold are discovered, as is what happened in the United States in 1849. If the economy is at full employment, what should this discovery do?
A) It should lower the money supply and cause deflation.
B) It should raise the money supply and cause inflation.
C) It should raise the money supply and cause disinflation.
D) It should raise the money supply but have no impact on the price level.
E) it should not change the money supply.
B
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The ability to produce a good using fewer resources than someone else is called
A) absolute advantage. B) comparative advantage. C) specialization. D) protectionism.
An increase in demand is represented graphically by a rightward shift of the demand curve
Indicate whether the statement is true or false
Strategies and incentives:
A. work the same whether games are played once or repeated. B. often work quite differently when games are repeated. C. do not change when the game is repeated. D. None of these statements is true.
Suppose most people regard emeralds, rubies, and sapphires as close substitutes for diamonds. Then DeBeers, a large diamond company, has
a. less incentive to advertise than it would otherwise have. b. less market power than it would otherwise have. c. more control over the price of diamonds than it would otherwise have. d. higher profits than it would otherwise have.