Suppose that the United States and Italy both produce wine and shoes. In the United States, wine sells for $10 a bottle and shoes sell for $40 a pair. In Italy, wine sells for 15 euros a bottle and shoes sell for 20 euros a pair. If the current exchange rate is 0.8 euro to the dollar, then
A. the United States will import both shoes and wine from Italy.
B. Italy will import both shoes and wine from the United States.
C. the United States will import shoes from Italy and Italy will import wine from the United States.
D. the United States will import wine from Italy and Italy will import shoes from the United States.
Answer: C
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Assume the market basket for the consumer price index has two productsbread and milkwith the following values in 2011 and 2016 for price and quantity: The Consumer Price Index for 2016 equals
A. 118.
B. 116.
C. 86.
D. 85
Higher government deficits ________ the supply of bonds and shift the supply curve to the ________, everything else held constant
A) increase; left B) increase; right C) decrease; left D) decrease; right
As price increases, demand typically
a. becomes more elastic b. becomes less elastic c. does not change d. elasticity does not change
Raising the minimum wage would:
A. help some workers while hurting others. B. help all workers and hurt all firms. C. hurt all workers and help some consumers. D. help workers and help consumers.