Which statement best describes the relationship between scarcity and shortage?
A) Neither scarcity nor shortages will exist if money prices are allowed to determine who gets what.
B) Scarcity and shortages are unavoidable as long as money prices are allowed to determine who gets what.
C) Scarcity is an inescapable fact of life but shortages are avoidable.
D) Shortages are an inescapable fact of life but scarcity can be eliminated.
C
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Data on exports and imports for the United States over the period from 1890 to 2008 show that
A) the United States had large trade deficits throughout this entire period. B) the United States had large trade surpluses throughout this entire period. C) the percentage of total output exported by U.S. firms fell dramatically during World War I and World War II. D) a higher percentage of U.S. goods was exported in recent years than in earlier years.
With rational expectations, a policy that would decrease AD would certainly lead to: a. higher inflation and lower unemployment in the short run
b. lower inflation and higher unemployment in the short run. c. higher inflation and no change in unemployment in the short run, if people's expectations were correct. d. none of the above.
If the Fed responds to an initial increase in aggregate demand by increasing the quantity of money...
What will be an ideal response?
As a firm continues to produce additional output, which of the following will continue to decline as output expands?
A. opportunity costs B. average total costs C. average fixed costs D. marginal costs