The reason people can't have everything they want is because
A) people are selfish.
B) scarcity exists.
C) there is not enough economic growth in the world.
D) none of the above
B
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Suppose the money market has an equilibrium interest rate of 10 percent. If the actual interest is 8 percent, which of the following occurs to bring the money market back to equilibrium?
A) People buy bonds, the price of bonds rises and the interest rate rises. B) People buy bonds, the price of bonds falls and the interest rate rises. C) People sell bonds, the price of bonds rises and the interest rate rises. D) People sell bonds, the price of bonds falls and the interest rate rises.
According to liquidity preference theory, equilibrium in the money market is achieved by adjustments in
a. the price level. b. the interest rate. c. the exchange rate. d. real wealth.