An economy in which people exchange goods and services in a market is called a:
A. socialist economy.
B. market economy.
C. centrally planned economy.
D. command economy.
Answer: B
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Suppose the equilibrium price of oranges is $2.00 per pound. If the actual price is above the equilibrium price, a
A) shortage exists and the price falls to restore equilibrium. B) shortage exists and the price rises to restore equilibrium. C) surplus exists and the price falls to restore equilibrium. D) surplus exists and the price rises to restore equilibrium. E) surplus exists but nothing happens until either the demand or the supply changes.
In a flexible exchange rate regime, a reduction in the expected future exchange rate will cause
A) the IP curve to shift to the left/up. B) the IP curve to shift to the right/down. C) a movement along the IP curve. D) neither a shift nor movement along the IP curve.