What are the four key functions of prices in the market system?
What will be an ideal response?
Prices reflect the desire buyers have for a product, they reflect the abundance or scarcity of a product, they serve as a means of communication between buyers and sellers and therefore help determine what will be produced and in what quantities, and they help coordinate all phases of production so producers have the right quantities of needed resources, in the right place, to operate.
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What type of relationship does the law of demand demonstrate?
A) direct B) equilibrium C) inverse D) dynamic
To correct the budget deficit for inflation, we should
A. multiply the budget deficit by the price deflator for GDP. B. subtract interest payments from tax revenues. C. divide the budget deficit by nominal GDP. D. divide the budget deficit by the consumer price index.