If domestic saving is greater than domestic investment, then a country will have a ________ and positive net capital ________.
A. trade surplus; inflows
B. trade surplus; outflows
C. trade deficit; inflows
D. trade deficit; outflows
Answer: B
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Suppose the exchange rate between the U.S. dollar and the Mexican peso was $1 = 5 pesos. A can of Pepsi sells for $2 in Boston and for 12 pesos in Mexico City
A) Purchasing power parity prevails with these prices. B) Purchasing power parity does not prevail with these prices. C) The U.S. dollar would be expected to depreciate. D) None of the above answers is correct.
In which of the following situations are wages the least likely to be sticky?
A) Unionized workers are in the second year of a three-year labor contract. B) A firm that pays efficiency wages to its employees is experiencing an economic recession. C) A firm has an implicit contract with its employees regarding wages during recessions and expansions. D) A firm hires hourly workers based on changes in the supply and demand for its products.
The price that represents the shutdown point for a perfectly competitive firm is the
a. highest point on the marginal cost curve b. lowest point on the marginal cost curve c. highest point on the average variable cost curve d. lowest point on the average variable cost curve e. lowest point on the average total cost curve
The immediate effects of a discretionary increase in government spending are represented by a: a. rightward shift of the aggregate demand curve. b. leftward shift of the aggregate demand curve. c. rightward shift of the Phillips curve
d. leftward shift of the Phillips curve. e. movement along the Phillips curve.