Ceteris paribus, with a fixed exchange rate, if Americans decide to buy more Japanese-made television sets, this causes a market ________ of Japanese currency and creates a balance-of-payments ________ for the United States.
A. shortage; deficit
B. surplus; surplus
C. surplus; deficit
D. shortage; surplus
Answer: A
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Which of the following is not a method to reduce the inflationary gap?
A. Increasing government spending B. Reducing transfer payments C. Raising taxes D. Decreasing government expenditure
The majority of government programs designed to help poor families consists of direct cash payments.
A. True B. False C. Uncertain
Refer to the table below. If the profit for each unit of paper product is $3.00 and the profit for each unit of lumber is $13.50, what is the marginal benefit for each unit of lumber produced?
Big Oaks can produce either paper products or lumber with each tree that they harvest. Because Big Oaks can adjust the amount of paper products and lumber they produce from the harvested trees, paper products and lumber are produced in variable proportions. The above table summarizes Big Oaks production possibilities from each harvested tree.
A) $13.50
B) $16.50
C) $10.50
D) $3.00
When the wage rate falls, if the substitution effect outweighs the output effect, the use of machinery will
A. rise. B. fall. C. remain the same.