Use the following table for Country X to answer the next question. Column 1 of the table is the world-market price of a product, Column 2 is the quantity demanded domestically (Qdd), and Column 3 is the quantity supplied domestically (Qsd). Assume the small-country model is applicable.PriceQddQsd$5.002004004.002503503.003003002.003502501.00400200If Country X opens itself up to international trade and the world-market price of the product is $3, then Country X will
A. neither export nor import the product.
B. import some units of the product.
C. not produce the product.
D. export some units of the product.
Answer: A
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Jackson buys an automobile insurance policy and then decides to drive recklessly because he knows he is insured in case he has an accident. This describes the problem of
A) adverse selection. B) asymmetric information. C) moral hazard. D) risk pooling.
Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left, ceteris paribus. Figure 3.1 Shifts of Supply and Demand Designer clothes: consumer confidence in the economy improves.
A. A. B. B. C. C. D. D.
An increase in income will cause
A) a reduction in the supply of central bank money. B) a reduction in the demand for currency. C) an increase in the demand for reserves. D) none of the above
Which of the following represent the national savings and investment identity - Supply of financial capital = Demand for financial capital - expressed in algebraic terms?
a. (M-X) = I - S - (T-G) b. S + (M-X) = I + (G-T) c. X - M = S + (G-T) - I d. I - S - (T-G) = (M - X)