A major factor in changing levels of imports in an open economy is:
a. real international rates of interest.
b. relative international price levels.
c. a change in a nation's disposable income.
d. a change in transportation costs.
Answer: c. a change in a nation's disposable income.
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The figure above shows the market for private elementary school education in Chicago. There is no external cost of private elementary education. If the government does not intervene in this market, the deadweight loss equals
A) 0. B) $800,000. C) $1,600,000. D) more than $1,600,000. E) more than $800,000 and less than $1,600,000.
If government policy makers were worried about the inflationary potential of the economy, which of the following would not be a correct fiscal policy change?
a. Increase consumption taxes b. Increase government purchases of goods and services. c. Decrease government purchases. d. None of the above.
When income taxes are included in the basic macroeconomic model, the value of the
a. inflationary effect is increased. b. multiplier is increased. c. multiplier is decreased. d. expenditure function is increased.
Figure 7-1
Of the graphs in Figure 7-1, which best represents marginal physical product?
a.
1
b.
2
c.
3
d.
4