Which of the following is TRUE about how trade deficits and government budget deficits are related?
A. The government budget deficit leads to higher interest rates that will lead to a trade deficit.
B. The government budget deficit leads to lower interest rates that will lead to a lower trade deficit.
C. The trade deficit leads to a reduction in investment that leads to a government budget deficit.
D. The trade deficit leads to a decline in imports relative to exports that leads to a government budget deficit.
Answer: A
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Refer to the payoff matrix below. In reference to the Nash equilibrium/equilibria in this game, which of the following is true?
Cruise R Us and Cruise the World compete in the cruise line industry. Each firm needs to determine if they are going to offer special cruise packages with special rates or not offer the specials. The above payoff matrix shows the firms' net economic profit for each set of strategies.
A) There are two Nash equilibria in this game.
B) There is one Nash equilibrium in this game.
C) There are three Nash equilibria in this game.
D) There are no Nash equilibria in this game.
Fixed costs are those costs that remain fixed no matter how long the time horizon is
a. True b. False Indicate whether the statement is true or false
The price of an airline ticket from Denver to Chicago costs $450. A bus ticket costs $150. Traveling by plane takes 2 hours compared with 32 hours by bus. Other things constant, Erica would gain by choosing air travel if, and only if, she values her time at more than
A) $5 per hour. B) $300 per hour. C) $10 per hour. D) $9.38 per hour.
If real disposable income fell during a particular year, we can conclude that:
A. personal taxes increased. B. inflation occurred. C. transfer payments declined. D. none of these necessarily occurred.