The law of increasing opportunity cost results in a constant slope of the production possibilities curve.
a. true
b. false
Ans: b. false
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When the Fed purchases federal government bonds in the open market
A) the demand for money expands. B) there is no change in the money supply. C) the money supply expands. D) the money supply contracts.
A lawsuit seeking compensation for damage from pollution
A) will ruin any chances the Coase theorem has of working to avoid the situation in the first place. B) is a substitute for bargaining, but an inefficient one. C) is a substitute for bargaining, and it can lead to the efficient solution. D) is preferable to switching the property rights between the parties. E) is how the Coase theorem was meant to work in the first place.
If the nominal interest rate is 8.3% and the inflation rate is 4.4%, what is the real interest rate?
Assume South Korea and Vietnam have the same amount of resources. In a given time period, South Korea can produce 100,000 jackets or 1,000,000 shirts. Vietnam can produce 200,000 jackets or 2,000,000 shirts. This means that
A. South Korea has an absolute advantage in jackets. B. South Korea has a comparative advantage in jackets. C. Vietnam has an absolute advantage in both jackets and shirts. D. Vietnam has a comparative advantage in shirts.