Considering an economy with a current trade surplus and considering only the direct effect of income, an expansionary monetary policy tends to:
A. decrease the exchange rate and decrease the trade surplus.
B. increase the exchange rate and decrease the trade surplus.
C. decrease the exchange rate and increase the trade surplus.
D. increase the exchange rate and increase the trade surplus.
Answer: A
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The market for maple syrup is perfectly competitive. Suppose that the market is in long-run equilibrium when the market demand for maple syrup increases. After the demand increases, a typical firm will
A) make zero economic profit. B) make an economic profit. C) incur an economic loss. D) exit the market.
Assume Leo buys coffee beans in a competitive market. It follows that
a. Leo has a limited number of sellers from which to buy coffee beans. b. Leo will negotiate with sellers whenever he buys coffee beans. c. Leo can influence the price of coffee beans if he buys a large quantity of them. d. None of the above is correct.
One of the major issues in the Uruguay round of GATT was
A. the placement of the WTO offices in Uruguay. B. the use of trade as a diplomatic weapon. C. the question of the Euro's convertibility. D. domestic content provisions for movies and television.
If total spending is less than the value of total output, firms
A. may decide to cut prices. B. may increase production levels. C. will tend to raise prices. D. will notice inventories falling.