Arbitrage operations can be executed
A) in foreign exchange markets.
B) in goods markets.
C) Both A and B.
D) None of the above.
C
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In the real business cycle model, an increase in current total factor productivity leads to
A) an increase in investment. B) a decrease in investment. C) no change in investment. D) an ambiguous response of investment.
The invisible hand principle indicates that competitive markets can help promote the efficient use of resources
a. only if buyers and sellers really care, personally, about economic efficiency. b. even when each market participant cares only about their own self interest rather than about the overall efficiency of resource use. c. even if business firms fail to produce goods efficiently. d. if, and only if, businesses recognize their social obligation to keep costs low and use resources wisely.