If fears of a terrorist attack are widespread and people lose faith in money, the economy could revert to a system of
A. cash and checks.
B. double-entry bookkeeping.
C. barter.
D. financial intermediaries.
Answer: C
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A market will tend to be more competitive when
a. there are a small number of firms in the market. b. similar products are available from alternative sellers. c. entry barriers into the market are high. d. governments require firms to meet strict regulatory standards.
Suppose the average income of a citizen of Poland is higher than the average income of a citizen of Romania. You might conclude that
a. Polish firms are faced with stricter government regulations than Romanian firms. b. total income is divided among fewer workers in Poland since it has a smaller labor force than Romania. c. Romania's climate allows for longer growing seasons and therefore Romania can produce large quantities of grain and other crops. d. productivity in Poland is higher than in Romania.
An economy has two workers, Jen and Rich. Every day they work, Jen can produce 2 TVs or 10 radios, and Rich can produce 4 TVs or 12 radios. To maximize total output, Jen should specialize in producing ________ while Rich should specialize in producing ________.
A. TVs; radios B. radios; TVs C. TVs; TVs D. radios; both goods
Which of the following refers to trade creation?
A. The net change in the volume of trade among member countries when they form a trade bloc B. The net increase in imports when foreign firms lower the prices of their exports C. The net increase in exports when the currency of a country depreciates with respect to a foreign currency D. The net volume of new trade that results from the formation of a trade bloc