Explain how the price system eliminates a surplus
What will be an ideal response?
A surplus means that quantity demanded is less than quantity supplied. This will lead to downward pressure on price. As price falls, quantity demanded rises and quantity supplied falls. This will continue until quantity demanded is equal to quantity supplied.
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Lower inflation rates are usually correlated with lower unemployment rates
a. True b. False Indicate whether the statement is true or false
Suppose the government auctions off permits to car and truck owners, with each permit allowing the user to emit five tons of carbon dioxide each year from his or her vehicle. The total amount of carbon dioxide permitted is less than the amount currently emitted by vehicles. These permits could then be bought and sold on a market. Which of the following is the best term for this type of system?
A. A cap-and-trade system B. A command-and-control system C. A mitigation allowance D. A price-based adaptation system
When Ford increases the production of cars in Romania, which of the following occurs?
A) GDP in the United States rises. B) GNP in the United States rises. C) GNP in Romania rises. D) Both A and C occur.
Using a credit card creates a financial:
A. liability for the person using it and a financial asset for the issuer. B. asset for the person using it and a financial liability for the issuer. C. asset for both the person using it and issuer. D. liability for both the person using it and issuer.