The tendency of the prices of identical baskets of goods across countries to converge:
a. Is stronger to the extent the countries compared have substantial tariffs on imported goods
b. Is weaker, the higher the cost of transporting the goods between countries.
c. Is stronger for goods and services not traded internationally.
d. Would tend to become weaker when countries eliminated quotas on imports of the goods in the baskets.
b
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Policymakers may be uncertain about the state of the economy because
A) initial releases of data may be less accurate than later data releases. B) they don't know the predominant source of shocks to the economy. C) they don't know how shocks affect people's expectations. D) they are not aware of modern macroeconomic modeling techniques.
The wealth of most people declined as a result of the financial crisis of 2007-2009. As a result, which asset was most likely became a larger portion of their portfolio?
A) bonds B) stocks C) house D) checking account
What is net marginal revenue?
A) The same as marginal profit. B) The additional revenue the firm earns from an extra unit of an internally produced intermediate input. C) The additional revenue the firm earns from producing one more unit of output. D) The additional revenue the firm earns from selling one more unit of output.
Sam has $200 a month to spend on two normal goods-tanning sessions or rounds of golf. Tanning sessions are $20 each, and a round of golf is $40. Sam currently consumes six tanning sessions and two rounds of golf. If the price of a round of golf drops to $20, the income effect:
A. predicts Sam will increase his consumption of both golf and tanning sessions. B. predicts Sam will double his consumption of golf. C. predicts Sam will consume more golf and less tanning sessions. D. predicts Sam will consume less golf and more tanning sessions.