Assume that French budget deficits have raised the French prime interest rate relative to the U.S. T-bill rate. As a result, we would expect the U.S. dollar to depreciate and the U.S. net exports to rise
a. True
b. False
Indicate whether the statement is true or false
True
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A local bar provides free pretzels and peanuts and cheap drinks on a Monday night. But soon a fight breaks out in the parking lot between two quarreling patrons. Neighboring homeowners awaken as a result, and call the police
What can we clearly conclude? A) The bar's free pretzels and peanuts generate a positive externality. B) Each fighter imposes a negative externality on the other fighter. C) The fighters impose a negative externality on the neighboring homeowners. D) The neighboring homeowners impose a negative externality on the police. E) All of the above are true.
Suppose the marginal product of labor is MPN = 200 - 0.5N
where N is aggregate employment. The aggregate quantity of labor supplied is 100 + 4w, where w is the real wage. The government imposes a minimum wage of 60. What is the quantity of employment? A) 240 B) 260 C) 280 D) 300
You are the Minister of Trade for a small island country with the following annual PPC:
You are negotiating a trade agreement with a neighboring island with the following annual PPC: 
If you offer to give the other island 1 coconut for every 4 fish they give you, then they will:
A. refuse your offer because they can produce as many coconuts as you can. B. accept your offer because their opportunity cost of a coconut is greater than 4 fish. C. accept your offer because your opportunity cost of a coconuts is less than 4 fish. D. refuse your offer because they have a comparative advantage in fish.
Explain how usury laws can distort the market for funds. What is the most likely result if a usury law is passed and enforced?
What will be an ideal response?