Increases in import spending _____________________, ceteris paribus
A) raise GDP
B) lower GDP
C) are always equal to decreases in exports
D) may raise or lower GDP
B
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Which of the following is a tool the Fed uses to adjust the quantity of money?
i. The Fed can change the interest rate banks charge for loans to their prime customers. ii. The Fed can change the discount rate on loans to banks. iii. The Fed can buy or sell government securities. A) i only B) ii only C) iii only D) i and iii E) ii and iii
If everyone agrees to a change, then the change will be a Pareto Superior move
a. True b. False
The Royal Proclamation of 1763 and the Quebec Act of 1774 had all of the following effects except:
a. increased the price of farm labor b. increased the price of farm land c. decreased competition for existing farmers d. encouraged Scotch, Irish and German immigrants to rebel against England
Mrs. Smith is operating a firm in a competitive market. The market price is $6.50 . At her profit-maximizing level of output, her average total cost of production is $7.00, and her average variable cost of production is $6.00 . Which of the following statements about Mrs. Smith's firm is correct?
a. Mrs. Smith is earning a loss and should shut down in the short run. b. Mrs. Smith is earning a loss but should continue to operate in the short run. c. Mrs. Smith is earning a profit since the price is above the average variable cost. d. Without knowing Mrs. Smith's marginal cost, we cannot determine whether she should stay in business or shut down.