Use the following graph, where Sd and Dd are the domestic supply and demand for a product and Pc is the world price of that product, to answer the next question.
If the economy is opened to free trade, the price and quantity of this product sold would be
A. Pa and z.
B. Pc and v.
C. Pc and z.
D. Pt and y.
Answer: C
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In the figure above, Jill is producing at point A. Jill's opportunity cost producing one pair of pants is
A) 2 shirts per pair of pants. B) 3 shirts per pair of pants. C) 3/5 of a shirt per pair of pants. D) 5/3 of a shirt per pair of pants.
Gross Domestic Product is a monetary measure of
a. total consumption in the economy. b. the total value of all final goods and services. c. total industrial output. d. the total value of all foreign sales and purchases.
The IS curve shows the combinations of output and the real interest rate for which
A. the goods market is in equilibrium. B. an increase in output will cause the market-clearing interest rate to be bid up. C. the labor market is in equilibrium. D. the financial asset market is in equilibrium.
Suppose the world was on the gold standard. If Japan ran persistent trade surpluses,
A. Japan's money supply would increase. B. Japan would experience inflation. C. Japan's exports would fall. D. All of the choices are true.