For Country A, the world price of soybeans exceeds the domestic equilibrium price of soybeans. As a result, international trade allows buyers of soybeans in Country A to experience greater consumer surplus than they otherwise would experience
a. True
b. False
Indicate whether the statement is true or false
False
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
The marginal social cost, MSC, of producing a good or service equals
A) MC + MB. B) MB + marginal external cost. C) MB + marginal external benefit. D) MC + marginal external cost.
According to the text, economists consider full employment to occur when
A) the sum of frictional unemployment and structural unemployment equals zero. B) the unemployment rate consists of only frictional and structural unemployment. C) frictional unemployment equals zero. D) everyone who wants a job has a job.
If the foreign income decrease, then we might expect net export spending to:
A. increase. B. decrease. C. remain constant. D. there is not enough information to determine what would happen.