Contractionary fiscal policy will lead to a(n)
A) decrease in the supply of dollars in the foreign exchange market.
B) fall in interest rates.
C) increase in the demand for dollars in the foreign exchange market.
D) reduction in exports.
Ans: B) fall in interest rates.
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The economic problem refers to
A. not having enough money. B. the attempt "to secure the greatest amount of pleasure with the least possible outlay". C. the notion that the wealth of nations depends on that country's ability to produce goods and services. D. None of the choices are true.
In a production possibilities frontier model, a point inside the frontier is
A) productively and allocatively inefficient. B) productively inefficient. C) productively efficient. D) allocatively efficient.
Ajax has just discovered that the marginal revenue product generated by the last worker hired was $75 while the marginal factor cost was $95. What should Ajax do?
A) Leave the level of production unchanged. B) Increase the amount produced. C) Reduce the amount produced. D) Collect more information before making a decision.
Suppose that with 1 unit of labor, Canada can produce 40 TVs or 20 computers. With 1 unit of labor, Taiwan can produce 30 TVs or 10 computers. Which of the following is correct?
a. Taiwan has a comparative advantage in the production of computers. b. Canada has an absolute advantage in the production of neither good. c. Canada has a comparative advantage in the production of computers. d. Taiwan has an absolute advantage in the production of computers. e. Taiwan has an absolute advantage in the production of TVs.