In a pure capitalist economy, "what to produce" is determined by
A. government central planning committees.
B. the price mechanism.
C. the credo: "Each according to his ability, to each according to his needs".
D. all of the choices are true.
B. the price mechanism.
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On a money demand diagram with the interest rate on the vertical axis, the real money balance demand schedule would be a vertical line under the assumption that
A) a lower interest rate raises the demand for real money. B) a lower interest rate lowers the demand for real money balances. C) the interest rate has no effect on the demand for real money balances. D) balances. E) a higher real GDP raises the demand for real money balances.
Which of the following would lead to a leftward shift in the supply curve for Czech kroner?
a. A decrease in the dollar-krona exchange rate b. An increase in the Czech Republic's GDP relative to U.S. GDP c. Expectation that the dollar price of the krona will rise d. Stronger Czech interest in U.S. audio CDs e. An increase in the U.S. interest rate relative to the Czech interest rate.