Consumers and firms are known as price takers only if
A) no market exists to determine the equilibrium price.
B) they can set the market price.
C) they cannot unilaterally affect the market price.
D) excess demand exists.
C
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Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S1 (point A). If there is a surplus of motorcycles how will the equilibrium point change?
A) The equilibrium point will move from A to E. B) The equilibrium point will move from A to B. C) There will be no change in the equilibrium point. D) The equilibrium point will move from A to C.
How would you define a currency board?
A) the process by which non-pegged interest rates are allowed to fluctuate B) the stockpiling of international reserves by developing countries C) using the dollar to carry out all domestic transactions, making the domestic currency a currency in name alone D) a constraint placed on monetary policy E) The monetary bases is backed entirely by foreign currency and the central bank holds no domestic assets.