In Figure 4-18, there would be a shortage of T-shirts if the price were
A. $10 and the market price will rise.
B. $8 and the market will tend toward equilibrium.
C. below $8 and the shortage persists.
D. between $8 and $6 and the shortage will get larger.
Answer: C
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Market prices
A) are limited in their information content. B) contain all available information. C) contain only past information. D) none of these choices.
If a country's current account balance is zero and the financial payments flowing in and out of the country's economy are equal, then which of the following must be a true statement?
a. It has an overall or net inflow of financial investment. b. It is not an overall or a net investor in other countries. c. It has an overall or net outflow of financial investment. d. Its government is not indebted to other governments.