Answer the following questions true (T) or false (F)
1. An expansionary monetary policy by the Federal Open Market Committee would cause interest rates to decline and the exchange rate to depreciate, ceteris paribus.
2. Comparative advantage is a monetary concept and is affected by changes in exchange rates or inflation.
3. The mercantilist philosophy argues that nations can become rich and powerful by exporting more than they import.
1. FALSE
2. FALSE
3. TRUE
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Refer to Figure 18.3. After trade and specialization begin, the maximum amount of scooters that Livonia can consume is
A) 120. B) 100. C) 80. D) 40.
A government subsidy for a good
A) is similar to a tax insofar as it decreases the production of the good being subsidized. B) increases production of the subsidized goods. C) punishes those who consume or produce the subsidized good. D) has no effect on the quantity of the good produced.
Which of the following is an example of spending on factors of production in the circular flow model?
A) The "Lucky Ducky" casino buys a new craps table for the casino floor. B) Laurence rents a car to drive to a wedding in San Diego. C) Yvette pays $50 to join a softball league. D) Tuan purchases a cappuccino at the student union.
Which of the following is an example of a regional currency arrangement?
A) exchange rate union B) currency cartel associations C) free-trade zones D) most-favored nation status E) agreement on commercial trade