Prices enable a market economy to adjust to unexpected events by
a. maintaining consumption and production at stable levels.
b. government rationing.
c. ensuring that producers always earn a profit.
d. adjusting consumption and production.
Ans: d. adjusting consumption and production.
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The LM curve represents combinations of income and interest rate which
A) clear the goods market. B) achieve the external equilibrium. C) clear the money market. D) achieve internal equilibrium.
A perfectly competitive firm's short-run supply curve is the:
a. segment of the marginal cost curve above average fixed cost. b. segment of the marginal cost curve above the minimum level of average variable cost. c. upward-sloping segment of the marginal cost curve. d. both a and b.
Which of the following is a positive effect of job search and the unemployment that often accompanies it?
a. It keeps wages and income levels low. b. It permits individuals to better match their skills and preferences with the requirements of a job. c. It reduces the wage gap between high skill workers and those with few skills. d. It creates political pressure for an increase in the minimum wage, which will reduce the rate of unemployment in the long run.
A nation can determine how close it is to the classical range by considering its:
a. Export position. b. Employment rate. c. Exchange rate d. None of the above.