The market system is also called the price system because
A) rising prices are the signal to producers to offer more of a particular good.
B) people pay money in markets.
C) everything has a price tag.
D) inflation is a significant problem.
A
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The aggregate demand curve shifts to the right when the Fed:
A. increases its target inflation rate, reflected by a downward shift in the Fed's policy reaction function. B. decreases real interest rates in response to inflation, but does not change its target inflation rate or the Fed's policy reaction function. C. decreases its target inflation rate, reflected by an upward shift in the Fed's policy reaction function. D. increases real interest rates in response to inflation, but does not change its target inflation rate or the Fed's policy reaction function.
The base year for a price index is the year_____
a. in which prices were lowest b. in which prices were highest c. in which real output was the largest d. in which prices were stable e. that serves as a reference point
Calculate the dollar price of a German automobile worth 40,000 euros, if the dollar per euro exchange rate is 1.5
a. $41,500 b. $26,700 c. $60,000 d. $50,000 e. $38,500
A prolonged recession in Europe should decrease the
a. supply of U.S. dollars. b. demand for U.S. dollars. c. supply of U.S. goods and services. d. demand by Americans for euros.