When a depreciation in the nation's real effective exchange rate initially lowers the trade balance and then increases it, economists refer to the phenomenon as:
a. the K-curve effect.
b. the J-curve effect.
c. the real balances effect.
d. the marginal propensity to import.
Answer: b. the J-curve effect.
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A) 12 magazines B) 6 magazines C) 2 magazines D) $60/month
Because the supply curve for land is inelastic, the price of land ______.
a. falls when the supply falls b. is determined by demand c. does not shift with demand d. rises when supply falls
What are the consequences of a firm exercising monopoly power?
A. Higher price and larger quantity sold. B. Higher price and smaller quantity sold. C. Lower price and larger quantity sold. D. Lower price and smaller quantity sold.
Suppose earnings are given by E = $60 + $7(24 ? L), where E is earnings and L is the hours of leisure. What is the price to the worker of consuming an additional hour of leisure?
A. $24 B. $12 C. $7 D. $10