In an open economy, the government deficit is 400 and investment exceeds saving by 300, so in equilibrium the trade deficit (IM ? X) must be
a. 100.
b. 200.
c. 300.
d. 700.
d
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If the aggregate supply curve is vertical, it follows that a change in
A) Real GDP can originate on the demand side of the economy. B) Real GDP can originate on the supply side of the economy. C) Real GDP can originate on either the demand side or the supply side of the economy. D) price level can originate on the demand side of the economy. E) b and d
If a developing country wants to limit the ability of its citizens to purchase foreign assets, but does not want to restrict other international transactions, it would offer:
A. not allow convertibility of domestic currency into foreign currency. B. convertibility on the capital account. C. full convertibility. D. convertibility on the current account.
Pam graduates from law school and gets a position in a law firm. At the same time the price of hamburger falls while other food prices have stayed the same. She notices that she buys less hamburger than she did before. Is she violating the law of demand?
A) Yes, since she is buying less hamburger at a lower price. B) Yes, since she is buying less hamburger in a relatively short period of time and we wouldn't expect her tastes to have changed. C) No, since the law of demand refers to relative price changes and the price of hamburger falling is an absolute price change. D) No, since other things are not held constant, such as her income.
If the supply curve for land was a vertical line, then any payment made for land would be considered
A) as economic rent. B) as economic lease. C) as economic interest. D) as an opportunity lease payment.