The higher the rate of inflation in Cuba, the greater the probability that Cuban residents will substitute U.S. currency for Cuban currency
a. True
b. False
Indicate whether the statement is true or false
True
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Using economic theory to analyze policy issues
A. is a way to avoid inconvenient facts. B. allows researchers to disprove a hypothesis. C. relies on simplifications to conduct studies. D. always includes the inclusion of political ideals.
A cartel
a. consists of two firms that collude to eliminate product differentiation so that they can sell their goods as identical goods b. is a group of firms that collude to limit competition within their market c. refers to the breakup of a firm into two or more firms where each produces a good that does not compete against the others d. is a government-supported merger of two or more firms to improve the nation's advantage in international trade e. is an illegal merger of two firms that produce unrelated goods
Automatic stabilizers have the effect of
a. Increasing aggregate demand when the nation is below full employment. b. Restraining the decline in demand but not stimulating any increase in aggregate demand that would move the nation back toward equilibrium. c. Causing government spending to rise and taxes to rise as a nation moves into a recession. d. Destabilizing a nation, once you consider the active deficits or surpluses they cause.
A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied
a. True b. False Indicate whether the statement is true or false