“OPEC is exploiting the United States by selling us oil at inflated prices.” Agree or disagree.
What will be an ideal response?
Trade is voluntary and only takes place if both sides gain. There is truth to the “inflated price” portion of the statement, since OPEC’s price is not truly market-determined but depends on price-fixing agreements. But even though the price is inflated, it must still be cheaper than the next best alternative, or the United States would not agree to buy OPEC oil.
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If savers require a 2% return and inflation is expected to be 3%, what approximate rate will banks offer savers?
A) 1% B) 3.2% C) 5% D) 6%
Gross domestic product (GDP) is a good measure of social welfare since it includes the value of leisure time
a. True b. False Indicate whether the statement is true or false
Which of the following statements is true?
A) If current Real GDP is greater than Natural Real GDP, the economy is in a recessionary gap. B) If current Real GDP is less than Natural Real GDP, the economy is in long-run equilibrium. C) Wages are flexible if the economy is self-regulating. D) Wages rise but prices remain constant in long-run equilibrium. E) All economists believe the economy is self-regulating.
Which of the following is a popular type of investment?
A. Dividends B. Portfolios C. Mutual funds D. Capital gains