An increase in the income of country A relative to the income of country B will usually lead to an increase in country:
A. A's exports to country B
B. B's imports from country A
C. A's demand for the currency of country B
D. B's demand for the currency of country A
C. A's demand for the currency of country B
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Aggregate demand refers to the relationship between
A. prices and the quantity of a good supplied. B. prices and the quantity of a good demanded. C. the price level and aggregate output supplied. D. the price level and aggregate output demanded.
Consider a game in which all outcomes give the players the same total payoff. Explain why every outcome in such a game will be Pareto optimal.
What will be an ideal response?
Imagine you are a buyer in a double oral auction with a reservation value of $10 and there is a seller asking $8
a. How much will you gain from accepting this offer? b. If you are the only buyer, and you know that the lowest ask price is $2, should you accept this offer?
In labor markets, a change in the wage rate has both an income and a substitution effect. An increase in wages causes an increase in real income but at the same time it increases the relative price of leisure for the worker. If an increase in wage rate causes an individual to work less, _____
a. the income effect dominates the substitution effect b. the substitution effect dominates the income effect c. the substitution and income effects cancel each other out d. then leisure will be referred to as an inferior good e. the increase in wage rates will cause an increase in the supply of labor