Prices usually allocate resources efficiently because they allocate
A. consumption to the highest cost of good or service.
B. resources to the lowest value good or service.
C. consumption to the lowest value good or service.
D. resources to the highest value good or service.
Answer: D
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
When deciding where to locate, businesses _____
a. will always locate in the lowest tax area b. pay no attention to property taxes c. might move to a high property tax area if local amenities are good d. will always locate closest to their customer base
What curve shows the quantity of goods and services that firms choose to produce and sell at each price level?
Consider a small open economy in equilibrium with a current account deficit. (a)Draw a diagram showing this situation.(b)What happens to national saving, investment, and the current account balance in equilibrium if government expenditures rise temporarily? Show this result in your diagram.
What will be an ideal response?