If the U.S. dollar becomes stronger in international foreign exchange markets, imported goods become less expensive. One immediate result of this is that
A. real Gross Domestic Product (GDP) increases.
B. net exports increase.
C. net exports decrease.
D. domestic employment rises.
Answer: C
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In an environment characterized by perfect competition, we expect that ________
A) there are very few firms in the economy B) there are many firms in the economy but a very few have the lion's share of the industry C) the are many small firms in the economy and every single firm is a price taker D) the government sets prices for all firms E) none of the above
The proponents of adaptive expectations believe that:
a. there will be a substantial time lag before people anticipate the effects of a shift to a more expansionary macro-policy. b. macro-policies that stimulate demand and place upward pressure on the general level of prices will temporarily increase output and employment. c. discretionary changes in macro-policy can be made in a manner that will reduce the economic ups and downs of a market economy. d. all of these are true.
Because of asymmetric information, most used cars that are offered for sale will be sold for prices that are greater than their true value. Because of this fact, the used car market falls victim to
A) the free-rider problem. B) deadweight loss and economic inefficiency. C) a surplus of used cars. D) adverse selection.
Ethanol (E10) refers to
a. an alternative fuel that includes 10 units of MTBE b. the fuel commonly called gasohol c. a fuel comprised of 10 percent ethanol and 90 percent gasoline d. all of the above e. (b) and (c) only