A country can gain by importing a good from abroad even if that good can be produced more efficiently at home. Is this statement true?
This statement could be true. Such imports make sense if they enable the country to specialize in producing those goods at which it is even more efficient. In determining the most efficient patterns of production and trade, it is comparative advantage that matters. Two countries can gain by trading even if one country is more efficient than another in the production of every good.
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Because everybody lives under uncertainty, everybody is
A) less than perfectly informed. B) ignorant of something. C) a speculator. D) all of the above. E) none of the above.
If supply is perfectly elastic, a sales tax imposed on sellers is paid by
A) only the buyers. B) only the sellers. C) both the buyers and sellers. D) None of the above answers is correct.
Fisheria is a country in which the quantity theory of money operates. The country has a constant population, capital stock, and technology
In 2010, real GDP was $300 million, the quantity of money was $60, and the velocity of circulation of money was 10. In 2015, the price level rose by 20 percent. a) What was the price level in 2014? (The price level is measured by the GDP deflator, which is 100 in the base year. So the price level from the equation of exchange needs to be multiplied by 100 to convert it to the GDP deflator.) b) What was real GDP in 2015? c) What was the velocity of circulation in 2015? d) What was the quantity of money in 2015?
Long-run macroeconomic policies concentrate on:
A) minimizing fluctuations around potential GDP. B) maximizing fluctuations around potential GDP. C) incentives for increasing productivity and the potential output of the economy. D) none of the above.