If the government decides to set the price of widgets below the equilibrium price
A. producers of widgets are now better off.
B. most economists would argue that one could reallocate resources and improve total welfare in the system.
C. the market quantity of widgets will increase.
D. people who buy the widgets are now worse off.
Answer: B
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The primary responsibility of conducting monetary policy rests with the:
A) Board of Governors. B) Federal Open Market Committee. C) Federal Deposit Insurance Corporation. D) U.S. Treasury.
The real risk-free interest rate is equal to:
a. Society's time preference for money. b. The tradeoff that society must make between buying a foreign or domestic product. c. For most nations, the rate at which financial institutions can borrow from each other when the expected inflation rate is equal to zero. d. None of the above is correct.
Compared to monopoly, the market results with monopolistic competition are usually expected to be:
A. worse because consumers get fewer choices. B. worse because consumers pay a higher price. C. better because consumers pay a lower price. D. better because consumers get less output.
The net exports effect is the ____ relationship between net exports and the price level of an economy.
A. inverse B. independent C. direct D. linear