The fact that the balance of trade normally falls before increasing after a devaluation is known as
A) the J-curve.
B) the pass-through effect.
C) the balance of payments paradox.
D) the indifference reflection.
A
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Whenever fiscal policy actions, such as income tax cuts, are utilized to expand the economy, the Keynesians prefer
a. a contractionary monetary policy. b. monetary policy to stay the same because of the liquidity trap. c. accompanying decreases in the money supply that will cause the interest rate to rise and, thus, prevent the crowding out of investment. d. accompanying increases in the money supply in order to prevent the interest rate from rising and, thus, prevent the crowding out of investment. e. both b and/or d
The law of diminishing marginal utility exists for the first four units of a good if they have marginal utilities of:
a. 1, 2, 4, 8. b. 8, 4, 1, 2. c. 4, 8, 2, 1. d. 8, 4, 2, 1.
Davy's Doggie Daycare rents a warehouse and field for $2,000 a month to house its boarding pooches. Farmer Fred owns the property, he used to use it for farming and made $3,000 a month, but has since retired. What is the cost of the warehouse and field to Davy?
A. It is an implicit cost of $3,000. B. It is an explicit cost of $2,000. C. There is both an explicit and implicit cost totaling $5,000. D. It is an implicit cost of $0.
If the price of product Y is $25 and its marginal cost is $18:
A. Y is being produced with the least-cost combination of resources. B. society will realize a net gain if less of Y is produced. C. resources are being underallocated to Y. D. resources are being overallocated to Y.