Economic choice and competitive behavior are the result of
What will be an ideal response?
scarcity
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Refer to Figure 19-11. The graph above depicts supply and demand for British pounds during a trading day, where the quantity is millions of pounds. In order to support a fixed exchange rate of $2.00 per pound, the British central bank must
A) buy 0.6 million pounds per trading day. B) sell 1.2 million pounds per trading day. C) buy 1.2 million pounds per trading day. D) sell 0.6 million pounds per trading day.
Which of the following statements is true?
A) Explicit costs are accounting costs, not economic costs; implicit costs are economic costs, not accounting costs. B) Economic costs include both explicit costs and implicit costs. C) An explicit cost is an actual cost; an implicit cost is a theoretical cost. D) An explicit cost is more important, dollar for dollar, than an implicit cost.
Which of the following statements is true of contracts?
a. They are used only in case of standardized transactions. b. They protect a seller's investment in the transaction. c. They allow the concerned parties to benefit from short-term price fluctuations in the market. d. They reduce the impact of market risk on the transaction as well as economic value in the long run.
Prior to the Great Depression, classical economists believed that a recessionary downturn would be reversed by:
a. higher wages and prices. b. lower wages and prices. c. an expansionary monetary policy on the part of the Federal Reserve System. d. an increase in government spending that would stimulate aggregate demand.