To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change.
B. increase.
C. decrease.
D. either increase or decrease depending on the relative shifts of AD and AS.
Answer: C
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A speculator who incorrectly anticipates a major decline in next year's harvest of some agricultural commodity
A) profits at the expense of consumers. B) profits at the expense of producers. C) sustains losses and increase price variation from this year to next. D) sustains losses but reduce price variation from this year to next.
What or who backs the value of fiat money?
a. The power of the state b. Gold and silver owned by the large commercial banks c. Foreign exchange held by the central bank d. Gold and silver owned by general public.
Entry leads to higher prices and profits in an industry.
Answer the following statement true (T) or false (F)
Daily Output of Russia and Panama?RussiaPanamaGloves 40240Hats120180
Refer to Table 18.1. Russia has a comparative advantage in:
A. hats. B. gloves. C. both hats and gloves. D. neither hats nor gloves.