If real interest rates decrease, we generally expect
A. saving to increase.
B. saving to decrease.
C. consumption spending to decrease.
D. no significant change in saving.
Answer: B
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The availability of vast stocks of natural resources is an example of a(n):
A) implicit cause of prosperity. B) explicit cause of prosperity. C) fundamental cause of prosperity. D) proximate cause of prosperity.
When people face bounded rationality, they are likely to
A. do nothing. B. consider every conceivable choice available to them when making decisions. C. rely on simple rules of thumb. D. behave irrationally.
Write down the budget constraint equation as well as the choice set for a worker who has 100 possible hours of leisure per week and can earn a wage of $25 per hour.
What will be an ideal response?
A country possesses a comparative advantage in the production of a good if
A) the opportunity cost in terms of forgone output of alternative goods is lower for this country than it is for its trading partners. B) it possesses an absolute advantage in the production of this good. C) it is able to produce more of this good per hour than can any other country. D) all of the above.