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84 Cards in this Set
- Front
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T or F: adding the capital account to the current account always yields a value of zero |
T |
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If spinach and kale are substitute goods for each other, a fall in the price of kale will cause A. The supply of spinach to fall B. The supply of spinach to rise C. The price of spinach to fall D. the price of spinach to rise |
C. The price of spinach to fall |
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If spinach and kale are substitute goods for each other, and spinach and orka are complementary goods to each other, a fall in the price of kale will cause A. The supply of orka to fall B. The supply of orka to rise C. The price of orka to fall D. The price of orka to rise |
D. The price of orka to rise |
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Which of the following would be the mos likely consequence of the imposition and enforcement of very strict rent control in city of washington DC? A. Higher rents for tendents and higher profits for landloards in surronding areas B. Imporved access by ordinary people to residential units in Washington DC C. Imporveed quality of residential rental units in Washington DC D. More construction in Washington DC, rental units |
A. Higher rents for tendents and higher profits for landlords in surrounding areas |
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Which of the following is not a consequence of a price floor? A. Difference between quantity demanded and quantity supplied in the market with the price floor. B. Surplus C. A reduction in the amounts that consumers actually get D. All of the above C. None of the above |
D. All of the above |
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Because of the operations of the law of diminishing marginal utility, a price ceiling ____________ the market value of a good or service that is subject to price ceiling A. Lowers B. Raises C. Leaves Unchanged D. None of the above |
B. Raises |
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In the current account goods and services are recorded A. all international sales and purchases of goods and services B. only sales and purchases of goods and services that occur domestically C. all international sales and purchases of assets D. only sales and purchases of assets that occur domestically |
A. all international sales and purchases of goods and services |
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T or F: adding the current account to the capital account can, but does not necessarily, yield a value of zero |
F |
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In an attempt to help home builders and existing homeowners, Jones proposes that gov put a price floor on homes- that is legislation that prevents anyone from legally buying or selling a home that is less than $75 per square foot. One likely result of this: A. a shortage of homes available for sale B. a surplus of homes available for sale C. more homes being sold D. none of the above |
B. a surplus of homes available for sale |
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Rent control is an example of A. inflation B. Price floor C. Price ceiling D. A policy of keeping rent prices always in equilibrium |
C. Price ceiling |
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Minimum wage legislation is an example of A. inflation B. Price floor C. Price ceiling D. A policy of keeping rent prices always in equilibrium |
B. Price floor |
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Legislation aimed at preventing price gouging in the aftermath of natural disasters in an example of A. deflation B. Price floor C. Price ceiling D. A policy of keeping rent prices always in equilibrium |
C. Price ceiling |
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Which of the following is not a consequence of a price ceiling? A. A shortage B. A surplus C. reduction in the price consumers actually get D. None of the above |
B. A surplus |
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The shortage caused by the price ceiling is shown on a line segment graph by
A. Pe-PL B. Qs-Qe C. Qe-Qd D. Qd-Qs |
D. Qd-Qs |
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The price ceiling causes the market value of the product to change. The size of that change is shown on a line segment graph by A. Pe-PL B. Pe-P2 C. PL-P2 D. 0-PL |
B. Pe-P2 |
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The market value of the product will be _____ if the price settles in at its equilibrium level shown on a line segment graph by A. Pe B. PL C. P2 D. 0 |
A. Pe |
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T or F: it is always more profitable for firms to produce where wages are lower than where wages are higher |
F
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If in 2014 foreigners sell $900 billion worth of goods and services to Americans and then literally burn all the money they received as payment for their goods and services, economics say that the _____________ explains why the value of those $900 million will in fact return in circulation A. Impossiblity Theorem B. Principle of comparative advantage C. Real cash balance effect D. Condorcet effect |
C. Real cash balance effect |
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T or F: many economics argue that a minimum wage statue increases the likelihood of employment discrimination by decreasing the number of workers who are available to be hired for each job |
F |
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T or F: Supply and demand analysis shows that no workers benefit from the imposition of a minimum wage |
F |
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T or F: A price ceiling will cause the amount of consumers actually get to fall |
T |
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Suppose that in 2014 foreigners sold $900 billion worth of G&S to Americans, and suppose that in 2015 they sell exactly the same amount to Americans. But suppose also that in 2015 foreigners are less willing to invest in America as they were in 2014. One consequence of this change in attitude by foreigners toward investing in America would be a A. higher current account deficit for America in 2015 than in 2014 B. Higher current account surplus for America in 2015 than in 2014 C. Lower current account deficit for America in 2015 than in 2014 D. Current account deficit for America of $0 in 2015 |
C. Lower current account deficit for America in 2015 than in 2014 |
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Suppose that tomato soup and pea soup are substitute goods for each other. A rise in the price of peas used to make pea soup will cause A. the demand for tomato soup to fall B. the demand for tomato soup to rise C. the supply for tomato soup to fall D. the supply for tomato soup to rise |
B. the demand for tomato soup to rise |
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Suppose that tomato soup and pea soup are substitute goods for each other. A rise in the price of peas used to make pea soup will cause
A. the price of tomato soup to fall B. the price of tomato soup to rise C. Nothing will happen to the price of tomato soup |
B. the price of tomato soup to rise |
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If the U. S. current account deficit in 2015 is $941 billion A. The U.S. Capital account deficit in 2015 will be $941 B. The U.S. Capital account surplus in 2015 will be $941 C. We have no way to know |
B. The U.S. Capital account surplus in 2015 will be $941 |
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Most economists believe that under a policy of free international trade A. each country will export G&S that it produces at a comparative advantage B. each country will export G&S that it produces at a comparative disadvantage C. The productive activities that produces in each specialty is unaffected D. More jobs will be created than are destroyed |
A. each country will export G&S that it produces at a comparative advantage |
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How do you calculate a current account deficit |
subtract money in from money out |
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Higher tariffs in America will, in the long run A. increase the overall rate of employment in America B. Decrease the overall rate of employment in America C. Have no effect on the overall rate of employment in America |
C. Have no effect on the overall rate of employment in America |
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Higher tariffs in Brazil in the long run A. increase the overall rate of employment in America B. Decrease the overall rate of employment in America C. Have no effect on the overall rate of employment in America |
C. Have no effect on the overall rate of employment in America |
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Rent control is an example of a ___________ a government policy that, economists predict, result in _____________ of the good or service A. price floor, surplus B. price floor, shortage C. price ceiling, surplus D. price ceiling, shortage |
D. price ceiling, shortage |
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Anyone who claims that lower labor cost in another country enable that country to produce everything at lower costs than they can be produced in some other country is A. Exaggerating the importance of labor costs B. necessarily referring only to comparative, not absolute cost C. not referring to monetary cost D. not using the concept of opportunity cost |
D. not using the concept of opportunity cost |
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What is a tariff |
tax on a good |
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T or F: many economics argue that a minimum wage statue increases the likelihood of employment discrimination by increasing the number of workers who are available to be hired for each job
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T |
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You are a landlord in a suburb very near San Francisco- a suburb that does not have rent control. All of your rental properties are in this suburb; you won nothing in San Francisco and do not live in that city. You care only about how much money you earn by renting your apartments to tendents. Therefore you A. want the gov of San Fran to abolish rent control in San Francisco B. want the gov of San Fran to make rent control in San Fran even more strict (lower rates) C. Do not care |
B. want the gov of San Fran to make rent control in San Fran even more strict (lower rates) |
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Suppose the world has only two countries. France and Vietnam. In 2014 the French people exported $100 million worth of French goods and services to the Vietnamese people while the Vietnamese people exported in return $85 million worth of Vietnamese goods and services to the French people. A. In 2014, France has a $15 million trade surplus B. In 2014, Vietnam has a $15 million trade surplus with France C. In 2014, neither has either a trade surplus or trade deficit D. In 2014, both have a trade surplusE. In 2014, both have a trade deficit |
A. In 2014, France has a $15 million trade surplus |
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Refer back to the info in last question: In 2015 the french people again exported 100 million worth of French G&S to the Vietnamese people while the Vietnamese people now export in return $90 million worth of Vietnamese G&S to the French People |
C. France trade surplus in 2015 is smaller than it was in 2014 |
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The economist David Friedman says that Americans grow cars in Iowa. By this statement Friedman means that A. Americans literally grow cars B. Americans have in recent decades built many car manufacturing plans on land in iowa that was once used to grow corn C. Americans, having a comparative advantage at growing corn in iowa, grow corn in iowa and export some of that corn to Japan, Sweden, Germany in exchange for cars D Americans, having a comparative disadvantage at growing corn in iowa, grow corn in iowa and export some of that corn to Japan, Sweden, Germany in exchange for cars |
C. Americans, having a comparative advantage at growing corn in iowa, grow corn in iowa and export some of that corn to Japan, Sweden, Germany in exchange for cars |
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People who subscribe to this economic doctrine _____________ imports because imports________ A. like, bring in money to the importing country B. dislike, bring in money to the importing country C. like, cause money to flow out of the importing country D. dislike, cause money to flow out of the importing country |
D. dislike, cause money to flow out of the importing country |
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People who subscribe to this economic doctrine favored a policy of free trade T or F |
F |
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T or F: the higher the price floor is set above the equilibrium price, the greater will be the resulting surplus of the good whose price is controlled by the price floor |
T |
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Economists explain the recurring shortages of gasoline throughout the 1970s in the United States as having been the result of A. the fact that the worlds supply of petroleum crude oil was falling B. the greed of oil companies C. an increase in Americans demand for gasoline D. the price ceilings that the U.S. government imposed on the markets for oil and gas in the 1970s |
D. the price ceilings that the U.S. government imposed on the markets for oil and gas in the 1970s |
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T or F: When economists say that foreigners who sell us their exports ultimately don't want our money they-economists- mean that although foreigners accept our money as payment for the products they sell to us, foreigners accept this money only because they plan to spend this money buying products that they want |
T |
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If greedy speculators come to believe that supplies of corn over the next month will fall dramatically to unusually low levels, these speculator will if they are not prohibited by government from doing so take actions today that A. Cause the price of corn today to fall lower, and the price of corn next month to rise higher than these prices would if speculators did nothing B. Cause price of corn today and next month to fall lower than these prices would if speculators did nothing C. cause the price of corn today to rise higher and the price of corn next month to fall lower than these prices would if speculators did nothing D. cause the price of corn today and next month to rise higher than these prices would if speculators did nothing |
C. cause the price of corn today to rise higher and the price of corn next month to fall lower than these prices would if speculators did nothing |
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The names of the set of economic docrins that were prior to the 1976 publicaion of Adam Smiths An inquiry into the nature of cause of the wealth of nations, widely believed by almost everyone to be true is A. marginalism B. Marxism C. Minimalism D. Mercantilism E. Materialism |
D. Mercantilism |
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People who subscribe to this economic doctrine that accepted this economic doctrine to be true believed that A. the amount of wealth in the world is fixed B. money is wealth C. exports make a country richer D. imports make a country poorer E. all of the above |
E. all of the above |
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People who suscribe to this economic docrirne _______________ exports because exports__________ A. like, bring in money to the exporting country B. dislike, bring in money to the exporting country C. like, cause money to flow out of the exporting country D. dislike, cause money to flow out of the exporting country |
A. like, bring in money to the exporting country |
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T or F: a price ceiling on apples set below the equilibrium price of apples cause the quantity demanded of apples to be higher than it is at equilibrium prices |
T |
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T or F: A price ceiling on apples set below the equilibrium price of apples makes apples less expensive for all consumers to get |
F |
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T or F: A price ceiling on apples set below the equilibrium price of apples likely will cause the quality of apples to fall |
T |
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Which of the following is not a consequence of a price floor A. Shortages B. Surplus C. A reduction in the amounts that the consumer actually gets |
A. Shortages |
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T or F: the national minumum wage in the United States was first imposed in 1938 chiefly because owners of textile mills in the northeastern part of the country pressured congress to impose a national minimum wage |
T |
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Ceteris paribus, with this price ceiling still in place, suppose the demand for grapes increase. The grape shortage then will A. grow worse B. Improve C. Impossible to say |
A. grow worse |
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When "speculators" buy oil today with the intention of selling that oil tomorrow at a higher price, these actions by speculators A. cause the demand for oil today demand to rise B. cause the price of oil tomorrow to be lower than it would be without speculation C. shift supplies of oil from today to tomorrow D cause consumers today to consume less oil than they would otherwise today consume E. All the above |
E. All the above |
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Which of the following best explains why the law of one price holds in reality? A. Everyone has comparative advantage B. In almost all cases, people choose at the margin C. Countries don't trade with each other, only flesh and blood individuals trade D. Arbitrageurs identify and act on opportunities to buy at low and sell high E. None |
D. Arbitrageurs identify and act on opportunities to buy at low and sell high |
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Which of the following is not an effect of rent control? A. The quantity supplied of rental housing falls B. the quantity demanded of rental housing falls C. a Shortage of rental housing occurs D. builders and developers have more incentive to build |
B. the quantity demanded of rental housing falls |
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Most economists believe that, under a policy of free international trade |
each country will export goods and services that it produces at a comparative advantage |
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Another name for what is usually called the trade deficit is A. intransitive preferences B. free trade C. protectionism D. current account deficit E. principle of comparative advantage |
D. current account deficit |
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The amount the consumer actually gets in a price ceiling is A. Qs B. Qe C. Qd D. 0 |
A. Qs |
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The quantity of grapes that the grape seller will supply with this price ceiling is A. Qs B. Qe C. Qd D. 0 |
A. Qs
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The actual market value of each pint of grapes under the price ceiling is A. P B. Pe C. P2 D. Not enough info |
C. P2 |
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Economists predict that this price ceiling will cause the quality of grapes offered for sale to A. fall B. rise C. remain unchanged |
A. fall |
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The shortage of grapes in a price ceiling is shown by the line segment A. 0 to Qe B. Qs to Qe C. Qe to Qd D. Qs to Qd |
D. Qs to Qd |
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T or F: the national minumun wage in America first enacted in 1938 was enacted because low wage workers in southern textile mills lobbied congress for such legislation hoping that a legislated min wage would boost the wages of these poor workers paid for their work in the southern textile mills |
F |
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T or F: a greater desire of foreigners to invest in America that is to acquire assesst such as stock will tend to increase America's current account deficit |
T |
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The real cash balance effect explains why A. When foreigners sell Americans more G &S Americans sell more G &S in return to foreigners B. when foreigners invest more in America, wages in America rise C. When foreigners invest more in America, America's capital account surplus rises D. When foreigners hold on to dollars for a long time, the purchasing power of dollars remaining in circulation increases |
D. When foreigners hold on to dollars for a long time, the purchasing power of dollars remaining in circulation increases |
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T or F: if government puts a ceiling on the price of cranberries, the amount of cranberries that consummers actually aquire and consume will fall |
T |
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The government of Romania imposes a price ceiling on bread and only on bread. if bread and rice cakes are substitute goods for each other, with of the following is most likely to happen if the price of rice cakes in R rises? A. the surplus of bread will worsen B. the surplus of bread will lessen C. The shortage of bread will worsen D. the shortage of bread will lessen |
C. The shortage of bread will worsen |
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If in 2014 China exports $950 billion of G &S to America, economists expect A. That Americans will export about $950 billion of goods and services to China B. No particular relationship between the value of Chinese exports to America and the value American exports to China |
B. No particular relationship between the value of Chinese exports to America and the value American exports to China |
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Economists generally support a policy of free trade because they believe that free trade A. increases the total number of jobs in the domestic economy B. reduces the risk of a country running a current account deficit C. leads producers in each trading country to specialize in those industry for which they enjoy a comparative advantage D. all the above |
C. leads producers in each trading country to specialize in those industry for which they enjoy a comparative advantage |
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A price floor on product X will artificially ______ the market value of X A. Lower B. Raise C. Trick question. No predictable effect on the market value of X |
A. Lower |
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Price ceiling for a P of figs. What is the actual market value of a pound of figs A. 0 B. P1 C. P2 D. P3 |
D. P3 |
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Referring to gragh, what is the amount consumers actually get with the price ceiling in place A. 0 B. Qs C. Qe D. Qd |
B. Qs |
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The current national min wage is $7.25 per hour. if that wage stays unchanged, but the supply of low skilled workers increase over time, because of immigration to U.S of low skilled immigrants, standard supply and demand analysis predicts that the number of unemployed low skilled workers will A. increase B. decrease C. be unaffected |
A. increase |
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The law of one price predicts A. governments will enact more and more legislation B. once a price of good X reaches its equilibrium level, that equilibrium level will never change C. over time the prices of all goods and services will become pretty much the same that is the price of oranges ill be pretty much the same as the price of beer which will be pretty much the same as the price of tickets D. At each moment in time in a given market, the price of a good will be pretty much the same across the market |
D. At each momentn in time in a given market, the price of a good will be pretty much the same across the market |
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The law of one price is true because A. government officials consciously act to make the law of one price operate B. Consumers will not pay for good X a price that is higher than the price they pay for good Y C. Profit seeking arbitrageurs, seeing good x sell at different prices in different places buy x a the lower priced place then sell x at the higher priced place |
C. Profit seeking arbitrageurs, seeing good x sell at different prices in different places buy x a the lower priced place then sell x at the higher priced place |
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___________ is the best word or term to describe the activity or forces that cause the law of one price to operate across time A. speculation B. legislation C. Domination D. Good fortune |
A. speculation |
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T or F: an equilibrium price in the market without government imposed price controls is a stable equilibrium |
T |
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T or F: an increase in the quantity supplied of butter can be caused only by an increase in the price of butter |
T |
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Economists argue that the main determinant of workers productivity is |
the amount of capital that workers have to work with |
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if they choose not to invest in America then the curent account deficit |
will fall and become smaller and smaller smaller account deficit |
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T or F: A price ceiling on apples set below the equil price of apples cause the quanity demanded of apples to be higher than it is a the equlib price |
T |
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T or F: a price ceiling on apples set below the equil price of apples makes apples less expensive for all consumers to get |
F |
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T or F: a price ceiling on apples set below the equl price of apples likely will cause the quality of apples to fall |
T |
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Which of the following is not a consequence of a price floor |
A shortage |
