Debt accumulation by the U.S. government in the 1980s:
A. Exceeded the debt the country had accumulated over the preceding 200 years.
B. Was small compared with earlier periods of history.
C. Was caused by war-related expenditures.
D. None of the choices are correct.
Answer: A
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An increase in the expected future marginal product of capital would cause the IS curve to
A) shift up and to the right. B) shift down and to the left. C) remain unchanged. D) remain unchanged if firms face borrowing constraints; otherwise, shift down and to the left.
An increase in total revenue will result if
A) demand is inelastic and price decreases. B) demand is elastic and price decreases. C) demand is elastic and price increases. D) demand is unitary elastic and price increases.
The industry elasticity of demand for good X is ?1.5, while the elasticity of demand for an individual manufacturer of good X is ?9. Based on this information, the Rothschild index of market power is:
A. 1/6, indicating there is significant monopoly power in this industry. B. 1/6, indicating there is little monopoly power in this industry. C. 6, indicating there is little monopoly power in this industry. D. None of the answers are correct.
Countries can expect to gain from international trade as long as they:
A. use trade restrictions to reduce competition for domestic producers. B. keep production diversified. C. specialize according to their comparative advantage. D. produce only those goods for which they have a relatively high opportunity cost.