Suppose a nation opens up to free trade and becomes an exporter of goods. Which of the following is then true of this nation?
A) The nation as a whole suffers losses.
B) Sellers gain.
C) Buyers gain.
D) Both buyers and sellers gain.
B
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Suppose real money demand is 1000, real output is 6000, and the price level is 200. What is the level of velocity in this economy?
A) 2 B) 3 C) 6 D) 12
An example of a market where a Bertrand model would be NOT be plausible is the market for
A) pizza. B) sweaters. C) motorcycles. D) toothpicks.
Suppose that the market price of sugar is 25 cents per pound and a farmer's marginal cost of producing sugar is 28 cents per pound. The farmer should increase her sugar production.
Answer the following statement true (T) or false (F)
Based on our understanding of the IS-LM model that takes into account dynamics, we know that a reduction in government spending will cause
A) an immediate drop in Y and immediate increase in i. B) an immediate reduction in i and no initial change in Y. C) a gradual reduction in i and gradual reduction in Y. D) a gradual reduction in i and an immediate reduction in Y.