The principal goal of the Treaty of Maastricht was the creation of a
A. fixed exchange rate system.
B. floating exchange rate system.
C. gold-exchange system.
D. monetary union.
Answer: D
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If the Marginal utility of the first bar of chocolate that Dan eats is 5 utils, then which of the following is most likely to be true?
a) Dan will eat 5 bars of chocolate. b) The marginal utility of the second bar of chocolate that Dan eats will be less than 5 utils. c) The marginal utility of the second bar of chocolate that Dan eats will be greater than 5 utils. d) None of the above.
The existence of the “underground economy” causes measured GDP to overestimate actual output.
Answer the following statement true (T) or false (F)
If Japan gives up ten bushels of rice to produce one bicycle, while the United States gives up five bushels of rice to produce one bicycle, then:
A. the opportunity cost of producing bicycles in the United States is higher than in Japan. B. Japan has a comparative advantage in the production of bicycles. C. total output will be highest if Japan specializes in rice and the United States specializes in bicycles. D. total output will be highest if the United States specializes in rice and Japan specializes in bicycles.
When nations specialize in their areas of comparative advantage and then trade with the rest of the world, the result is that
A. worldwide economic efficiency will decrease. B. the average standard of living in the world will go down. C. the average standard of living in the world will go up. D. the world will move from a point on the production possibilities curve to a point inside the curve.