Which of the following measures of cost is best described as "the cost of a typical unit of output if total cost is divided evenly over all the units produced?"
a. average fixed cost
b. average variable cost
c. average total cost
d. marginal cost
c
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Which of the following could explain why the terms of trade of developing countries might deteriorate over time?
A) Developing country exports consist mainly of manufactured goods. B) Developing country exports consist mainly of primary products. C) Commodity export prices are determined in highly competitive markets. D) Commodity export prices are solely determined by developing countries. E) Developing country exports are too diverse.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1. B. P2 and Y1. C. P2 and Y3. D. P1 and Y2.
Figure 11-3
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In Figure 11-3, which line represents the change in the consumption schedule caused by a cut in the personal income tax as advocated by President George W. Bush in 2001?
A. C1 in graph (a) B. C2 in graph (a) C. C1 in graph (b) D. C2 in graph (b)
All of the following contributed to a surge in international lending to developing countries in the mid-1970s to early 1980s EXCEPT
A. There was widespread pessimism about the profits that could be earned through new business investments in the industrial countries. B. The governments of the developing countries discouraged foreign direct investment (FDI). C. Oil-exporting countries had a high short-run propensity to save out of their extra income. D. Oil-exporting countries invested most of their increased savings in government bonds issued by developing-country governments.