How is the market clearing price established in a perfectly competitive industry?
What will be an ideal response?
The market clearing price is established by the forces of market supply and demand. Market demand is determined collectively by the buyers. Market supply is determined collectively by the suppliers. Even though each individual supplier or buyer has no control on the price of the product in a perfectly competitive industry, the interaction of all the buyers and suppliers determines the price.
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Under a flexible exchange rate system, an increase in the value of the U.S. dollar in terms of other currencies is referred to as
A) a depreciation of the U.S. dollar. B) an appreciation of the U.S. dollar. C) a monetizing of the U.S. dollar. D) a devaluation of the U.S. dollar.
Which of the following is true if all the national debt were owned internally?
a. The federal government would not need to refinance the national debt. b. The federal government would not need to worry about raising taxes to pay interest on the national debt. c. We would still be concerned about the effect on the distribution of income from interest payments on the national debt. d. All of these are true.