Prices provide signals about resource allocation to all individuals in a ________ system
A) market
B) command and control
C) central planning
D) political
Answer: A
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A sudden fall in the market demand in a competitive industry leads to
a. A short run market equilibrium price lower than the original equilibrium b. A market equilibrium price lower than the short run price c. New firms entering the market d. All of the above
If real disposable income increased by $10,000 and real consumption spending increased by $7,500, what is the marginal propensity to consume (MPC)?
a. 0.25 b. 1.0 c. 0.75 d. 1.75 e. 1.25
Which of the following statements about gross domestic product and gross national product is true?
a. Gross domestic product includes income payments to foreigners for their work domestically; gross national product does not. b. Gross domestic product includes the income earned abroad by domestic citizens; gross national product does not. c. Gross domestic product includes exports; gross national product does not. d. GDP and GNP are equal.
A good way to start every Three-Sector-Model analysis is to:
a. Describe what is happening in the foreign exchange market and then proceed to explain what happens in the other two markets simultaneously. b. Identify the economic effects that result from an economic change and then work your way backward to identify the most important part of the analysis, which is the economic shock that started it all. c. Analyze the chain reaction of economic interactions. d. Gather basic information about the three markets and describe qualitatively the economic setting in each market.