The existence of an inflationary gap should cause
a. wages to fall.
b. prices to fall.
c. unemployment to rise.
d. net exports to rise.
d
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The "real" interest rate charged on a loan is the
A) prime rate. B) prime rate plus the risk premium. C) the rate charged minus the costs of supplying credit. D) the rate charged minus the expected rate of inflation.
Which theory suggested that comparative advantage arises from differences in national factor endowments?
a. Mercantilism b. Heckscher-Ohlin c. Absolute Advantage d. Comparative Advantage
Unlike the 1920–21 episode, 1929–30 farm prices stood up fairly well when other prices fell
Indicate whether the statement is true or false
Suppose the government of Portico wants to discourage the consumption of tobacco among its citizens. Which of the following strategies would it adopt?
a. Taxing the buyers with relatively elastic demand b. Taxing the buyers with relatively inelastic demand c. Taxing the sellers with relatively inelastic supply d. Taxing the buyers with perfectly inelastic demand