Say's law states that supply creates its own demand because
A. there is always a buyer for every good produced.
B. supply prices are always equal to demand prices.
C. prices are such that, in the short run, producers know exactly how much to produce.
D. the act of producing creates an income sufficient to purchase all that is produced.
D. the act of producing creates an income sufficient to purchase all that is produced.
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Among the rationales for state owned enterprises is
(a) existence of monopoly. (b) the need for capital formation. (c) desirability of national control over strategic sectors of the economy. (d) all of the above. (e) none of the above.
What are two main obstacles to increased international integration?
What will be an ideal response?
Stewie spends all of his income on movie rentals (R) and noodles (N). His marginal rate of substitution for rentals with noodles is given by MRSRN = 20/?R. Suppose that movies rent for $2 and noodles cost $1. Plot his income-consumption curve, his Engle curve for movie rentals and his Engel curve for noodles.
What will be an ideal response?
The structural unemployment rate is 3.1 percent, the frictional unemployment rate is 2.1 percent, and the current unemployment rate is 6.0 percent. The economy is in
A) a recessionary gap producing less than Natural Real GDP. B) an inflationary gap producing more than Natural Real GDP. C) long-run equilibrium. D) an inflationary gap producing Natural Real GDP. E) a recessionary gap producing more than Natural Real GDP.