When analyzing the impact of a budget deficit, an economist will focus on
A. strictly the ratio of the deficit to GDP (it doesn't matter what is purchased with the borrowed money).
B. strictly the amount borrowed.
C. strictly the inflation-adjusted amount borrowed.
D. the ratio of the deficit to GDP and whether what is purchased with the borrowed money can be considered an investment.
Answer: D
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By monitoring financial diaries of several of the world's poorest families, economists found that a challenge facing the poor was:
A. they did save any money to pay down debts. B. their income fluctuated a lot, in addition to being low. C. they often did not diversify their savings and had "their eggs all in one basket". D. All of these are true.
Which of the following causes the market demand curve for a good to shift?
A. The cost of factors of production. B. The number of buyers in the market. C. The expectations about future sales. D. A producer's income.
Answer the following questions true (T) or false (F)
1. If additional units of a good are produced at an increasing opportunity cost, the production possibilities frontier would be bowed outward (concave). 2. On a diagram of a production possibilities frontier, economic decline (negative growth) is represented by the production possibilities frontier shifting inward. 3. If Sanjaya can shuck more oysters in one hour than Tatiana, then Sanjaya has a comparative advantage in shucking oysters.
During World War II, the price of rubber went up considerably. The rise in price stimulated research for alternatives. Today's automobile tires are made almost entirely from synthetic materials. As a result, the increase in the price of rubber eventually led to a very large drop in quantity demanded. This is an example of how the price elasticity of demand:
A. rises the less specifically the good is defined. B. rises the greater the time frame considered. C. falls the greater the time frame considered. D. falls the less specifically the good is defined.