quiz 3 Flashcards Preview

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Flashcards in quiz 3 Deck (10):
1

Economics is based on the questions of how people deal with:

scarcity

2

Markets require one on one negotiation. That is, the grocery store or Wal-Mart does not count as a market.

False

3

Adam Smith argued the markets require ______ if they are to work correctly:

competition

4

If the demand for a good rises, both the equilibrium price and quantity should rise.

True

5

Adam Smith believed that:

markets usually give the right answer, but sometimes they fail

6

The purchase of clothes made in Viet Nam would appear in the US balance of payments in the _____ account.

current

7

There are billions of dollars of error every year and for almost every country in the calculation of the balance of payments.

True

8

From World War II to the 1970s, the world used:

fixed exchange rates

9

China keeps the dollar from ______ against the Yuan.

falling

10

China does what it does in question 9 to:

keep prices of Chinese goods low in the US