Which of the following would be a positive economic statement?
a. Bankers are now charging higher interest rates on credit cards to cover the increased cost of loaning funds to consumers
b. The United States should be more aggressive in its trade negotiations with its major trading partners to help reduce the trade deficit
c. More money should be allocated by the Federal government to social programs and less money to national defense
d. Rents for apartments in this city are too high and must be controlled by city government to keep landlords from making too much profit
Ans: a. Bankers are now charging higher interest rates on credit cards to cover the increased cost of loaning funds to consumers
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If the market demand in a monopolistically competitive industry increases, a likely result in the long run will be
A) less elastic demand curves facing each firm. B) a higher ratio of price to average cost. C) a larger number of firms producing a similar product. D) a transition from monopolistic competition to oligopoly.
Over the past few decades, nominal interest rates have been higher than real rates of interest. This means that
A. lenders must have expected inflation. B. borrowers must have expected deflation. C. lenders must have expected prices to fall. D. borrowers must have expected prices to fall.
The unemployment rate is the percentage of people in the labor force who are both able to and looking for work but who cannot find jobs.
Answer the following statement true (T) or false (F)
Refer to Table 2-5. Estonia has a comparative advantage in the production of
A) neither product. B) lumber. C) cell phones. D) both products.