Which of the following decreases the price of the dollar relative to the euro?
A. an increase in the supply for euros
B. a decrease in the demand for euros
C. an increase in the demand for dollars
D. a decrease in the supply of euros
Answer: D
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Mr. Peabody chooses to invest in companies that produce goods and services at the lowest possible cost. Mr. Peabody is investing in companies that are
A) guaranteed to make a profit. B) productively efficient. C) allocatively efficient. D) all of the above
Consider a used car market in which half the cars are good and half are bad (lemons). Suppose the average price of a good car is $9,000 and the average price of a lemon is $3,000
If rational buyers are willing to pay $6,000 for a used car, then sellers will agree to sell mostly lemons at this price. What is the term used to describe this situation? A) adverse selection B) an efficient market C) moral hazard D) economic irrationality
The money supply falls from $900 billion to $850 billion. According to the simple quantity theory of money, the price level will ___________ by __________ percent.
A. rise; 5.6 B. fall; 5.6 C. rise; 6.2 D. fall; 6.2
Which of the following schools of economic thought would be against balancing the budget during a recession?
A. The classical school B. Keynesians C. Monetarists D. Supply side economics