If Mexico experiences a period of stable prices while the United States experiences rapid inflation, what will happen in Mexico?
a. an increase in aggregate supply
b. a decrease in aggregate supply
c. a decrease in aggregate demand
d. an increase in aggregate demand
d
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In Solow's exogenous growth model, the economy reaches a stable steady state because
A) the marginal return of capital is decreasing. B) capital is growing at a constant rate. C) the substitution effect is stronger than the income effect. D) conditional convergence holds.
A monopoly sells 10 units of output at $10. If the MR of the 11th unit is $4.50, then the price of the 11th unit is
A) also $10. B) $9.50. C) greater than $10. D) $7.25.
If the United States imposed a 25 percent tariff on imports of minivans, the effect would be to
A. raise the price and reduce the quantity of imports. B. raise the price and the quantity of imports. C. lower the price and the quantity of imports. D. raise the quantity and reduce the price of imports.
If a country's GDP increases and all other variables remains constant, ________
A) its income per worker will increase B) its income per capita will fall C) its GNP will fall D) its trade surplus will increase