Which of the following is true? i) A rational choice is made on the margin. ii) Microeconomics is the study of the national economy while macroeconomics is the study of the global economy. iii) Economists try to understand how the economic world works by testing normative statements.
A. Only ii
B. i and ii
C. Only iii
D. i and iii
E. Only i
Answer: E. Only i
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If a country has a net capital inflow, it means they have:
A. a trade surplus. B. a trade deficit. C. more exports than imports. D. more capital goods flowing into their country than out of it.
Suppose the economy is in long-run equilibrium. If there is an increase in the supply of labor as well as an increase in the money supply, then we would expect that in the short-run,
a. real GDP will rise and the price level might rise, fall, or stay the same. b. real GDP will fall and the price level might rise, fall, or stay the same. c. the price level will rise, and real GDP might rise, fall, or stay the same. d. the price level will fall, and real GDP might rise, fall, or stay the same.
If average labor productivity in two countries is the same, average living standards will be higher in the country with:
A. the smaller population. B. the higher share of population employed. C. the lower share of population employed. D. the larger population.
Which of the following statements is FALSE?
A) The federal budget deficit in 2004 was about 4 percent of the GDP.
B) During the past five years, the U.S. public debt has been increasing.
C) The public debt of $25 billion is the accumulated debt of all U.S. individuals, firms, and institutions.
D) A budget deficit of $25 billion in a given year increases the public debt by $25 billion.