Free trade and globalization is generally believed
A) to cause a degradation in the world's environment.
B) to improve the environment by correcting for distortions caused by import competing policies.
C) to help spread the best of each country's culture, so as to uplift global cultural standards.
D) to help each country safeguard the best of its own culture.
E) to make no difference in the economic welfare of the world.
A
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Which of the following increases aggregate demand and shifts the AD curve rightward?
A) a fall in the price level B) an increase in the quantity of money and a resulting fall in the interest rate C) predictions of a recession that lead to expectations of lower future income D) an increase in the exchange rate that makes imports less expensive
Bobby makes a New Year's resolution to lose weight. On January 3rd, he decides to go to Ben amp; Jerry's for ice cream instead of going to the gym. Using the concept of revealed preference, economists would most likely conclude that Bobby:
A. is not a rational individual. B. actually gains more utility from ice cream than working out. C. has changed his preferences. D. has no choice over the actions he takes.
An inflationary gap exists when consumers
a. are saving more than businesses are investing. b. and businesses are purchasing less than the economy is capable of producing. c. and businesses are demanding more than the economy is capable of producing. d. and businesses are demanding less than the full employment level of output.
Bubba is a shrimp fisherman who used $2,000 from his personal savings account to buy a boat and equipment for his shrimp business. The savings account paid 2% interest. What is Bubba's annual opportunity cost of the financial capital that he invested in his business?
a. $20 b. $40 c. $200 d. $400