Does voluntary exchange create wealth (value)?
What will be an ideal response?
Yes, trade generally permits the trading partners to gain more of what they value; this is why they agree to the terms of the exchange.
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If there is an inflationary gap, what is the proper monetary policy to restore price stability? What actions can the Fed undertake to restore price stability?
What will be an ideal response?
Increases in real GDP since 1900 can actually underestimate growth in the standard of living for Americans since 1900 because
A) the crime rate was higher in 1900 than it is today. B) goods and services are more expensive today as compared to 1900. C) the quality of health care that exists today was not available in 1900. D) the level of pollution in 1900 was much higher than it is today.
Refer to Table 15-1. What is the firm's profit-maximizing output and what is the price charged to sell this output?
A) P = $65; Q = 14 B) P = $70; Q = 13 C) P = $80; Q = 11 D) P = $85; Q = 10
Which of the following is not an example of a government purchase?
a. Salaries of teachers in public schools b. Chinese toys to be sold in stores c. Purchase of military aircrafts d. Construction of an interstate highway e. Building a public school