If the United States consumption possibilities are greater than its production possibilities, then the United States must have
A. protectionism.
B. an open economy.
C. autarky.
D. a closed economy.
Answer: B
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Answer the following statement(s) true (T) or false (F)
1. If a firms fixed costs increase from $2,000 to $3,000, then its marginal cost is $1,000. 2. If a firm can sell one more unit of its product for $7 and the marginal cost of producing that one more unit is only $5, then it should definitely produce and sell one more unit.
Use the following table to answer the next question.YearUnemployment Rate (%)Inflation Rate (%)14.03.024.52.535.02.045.53.056.04.5Based on this data, which years reflect a short-run change in aggregate demand?
A. 1, 3, and 5 B. 2, 3 and 4 C. 1, 2, and 3 D. 3, 4, and 5
According to the quantity theory of money, inflation causes an increase in the money supply
Indicate whether the statement is true or false
Which of the following is not an advantage to a country of choosing to fix its exchange rate against a major currency, rather than choosing a floating exchange rate?
A) Pegging reduces the uncertainty caused by currency fluctuations and thereby simplifies business planning. B) Pegging allows the country more flexibility in conducting monetary policy. C) Pegging insures that interest payments stemming from foreign loans do not fluctuate with the value of the currency. D) Pegging helps avoid inflation in imported goods caused by currency depreciation for countries with significant levels of imports.