One reason why purchasing power parity may not work perfectly is that transportation costs reduce trading possibilities
a. True
b. False
A
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In the specific factors model, the effects of trade on welfare overall are ________ and for fixed factors used to produce the imported good they are ________
A) positive; negative B) positive; positive C) negative; positive D) ambiguous; positive E) positive; ambiguous
Zero economic profits for a perfectly competitive firm in the long run means
A. the firm must exit the industry. B. the firm is in equilibrium. C. the firm will shut down until the market improves. D. average revenue is insufficient to cover long-run average cost.
How would an increase in the required reserve ratio affect banks' ability to create money?
a. Banks will be able to create more money because of the decrease in excess reserves. b. Banks will be able to create more money because of the increase in the demand deposit multiplier. c. It will have no effect on banks' ability to create money. d. It will reduce banks' ability to create money by forcing them to hold more reserves. e. It will reduce the banks' ability to create money by increasing excess reserves.
The average tax rate is
a. the ratio of additional taxes to an additional dollar of income. b. the ratio of taxes to income. c. the ratio of taxes to GDP. d. the ratio of income to direct taxes.