In an open economy, the quantity demanded of corn in the domestic market is ________.
A. 600 million bushels
B. 900 million bushels
C. 150 million bushels
D. 300 million bushels
Answer: D
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In the Keynesian model, if interest rates rise above what people consider normal, households will respond by
A) increasing the saving rate. B) reducing the saving rate. C) holding more money. D) holding more bonds.
Consider a society consisting of just a farmer and a tailor. The farmer has 10 units of food but no clothing. The tailor has 40 units of clothing but no food. Suppose each has the utility function U = F ? C. The price of clothing is always $1
What is the competitive equilibrium price for food? A) $5 B) $4 C) $3 D) $2
A bond that pays a high interest rate
A. is more secure than one that pays a low interest rate. B. is guaranteed by the U.S. government. C. reflects the higher risk that the issuer will default. D. will sell for a high price.
According to the theory of rational expectations, the government can influence output
a. with appropriate fiscal and monetary policy. b. in the short run, but not in the long run. c. without affecting the price level. d. only by making unexpected changes in aggregate demand.