Equilibrium takes place where:
A. supply and demand intersect.
B. supply is highest.
C. demand is highest.
D. prices are maximized.
A. supply and demand intersect.
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Which is NOT true about the use of economic models?
A) Economic models are simplified representations of the real world. B) Economists always use experiments in science laboratories to test their theories. C) Economists use what has already happened in the real world to test their theories. D) Economists are employed to explain economic phenomena but are never used to predict what might happen next.
Exchange rate fundamentals, such as the income level, interest rates, and the price levels,:
A. affect exchange rates, but only in the short run. B. affect exchange rates but are not as important as expectations in the long run. C. do not affect exchange rates in the short run or the long run. D. affect exchange rates and are more important than expectations in the long run.
Which of the following is the best description of the risks of corporate bonds?
a. the firm declines to pay dividends b. both bankruptcy and higher market interest rates c. only bankruptcy d. lower market interest rates e. both the firm declines to pay dividends and higher market interest rates
The contract curve is the collection of points where utility curves are tangent in the Edgeworth box.
A. True B. False C. Uncertain