A Competitive Equilibrium Is Pareto Optimal If There Is No

question 31

Multiple Choice

A competitive equilibrium is Pareto optimal if there is no way to rearrange or to reallocate goods so that

• A) anyone can be made better off.
• B) no one can be made worse off.
• C) someone can be made better off without making someone else worse off.
• D) someone can be made better off without making everyone else worse off.
• E) everyone id made better off.

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Definitions:

Default

The failure to promptly pay interest or principal when due, which can occur in regard to debts like loans or securities.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan.

Exchange Rate

The equivalent value of one currency in another currency.

Open-Economy Macroeconomic Model

A model that analyzes an economy that is engaged in international trade, focusing on the interactions with the rest of the world.