Suppose that supply increases and demand decreases. What effect will this have on price and quantity?
A. Price will decrease and quantity will increase.
B. Price will decrease and quantity will decrease.
C. Price will increase and quantity may rise or fall.
D. None of the statements associated with this question are correct.
Answer: D
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Specialization in production is important primarily because it:
A. results in greater total output. B. allows society to avoid the coincidence-of-wants problem. C. allows society to trade by barter. D. allows society to have fewer capital goods.
A citizen in a developing country with a currency policy of convertibility on the current account could engage in all of the following transactions except:
A. sell foreign currency resulting from the exports of manufactured t-shirts. B. sell foreign currency resulting from the sale of a U.S. treasury bond. C. purchase foreign currency in order to import a BMW. D. purchase foreign currency in order to purchase a U.S. treasury bond.