Which of the following is an essential part of the market mechanism?
A. Changing relative prices
B. Constant prices
C. Falling average prices
D. Rising average prices
A. Changing relative prices
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If points A and B are two locations on a country's production possibility frontier, then
A) the country could produce either of the two bundles. B) consumers are indifferent between the two bundles. C) producers are indifferent between the two bundles. D) at any point in time, the country could produce both. E) both bundles must have the same relative cost.
If the government collects taxes and makes expenditures of a smaller amount, bank reserves
A) are unaffected. B) may rise or fall. C) rise. D) fall.
Changes in consumer confidence, business optimism, government spending, and foreign events that cause economic volatility are known as
A) Supply Shocks. B) Demand Shocks. C) Aggregate Demands. D) Real Business Cycles.
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
According the graph shown, if this economy were open to free trade, it would:
A. export this good, because the world price is greater than the domestic price. B. import this good, because the world price is greater than the domestic price. C. import this good, because the domestic price is greater than the world price. D. export this good, because the domestic price is greater than the world price.