Economics Is Concerned with the Trade-Offs That Emerge Because of Scarcity.The

question 82

Multiple Choice

Economics is concerned with the trade-offs that emerge because of scarcity.The term "trade-offs" refers to

• A) the decision about whether households or businesses should bear the entire burden of the scarcity problem.
• B) the buying and selling that occur as unwanted goods are exchanged for goods that are desired.
• C) the alternatives given up when making choices.
• D) recycling and transforming old goods into new goods to reduce scarcity problems.
• E) forcing businesses to produce some goods and services and not others.

Grasp the concept of purchasing power parity and its role in determining exchange rates.

Identify the effects of exchange rate changes on a country's trade balance and balance of payments.

Understand the intervention strategies central banks use to influence exchange rates in a managed float system.

Analyze how economic policies can affect international capital flows and their impact on exchange rates.