Net exports are the sum of
A) the current account balance and capital account balance.
B) the balance of payments accounts.
C) exports and imports.
D) the private sector balance and the government sector balance.
E) the current account balance and the official settlements account balance.
D
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It has been said that “economics is the science of common sense.” Is economics synonymous with common sense?
What will be an ideal response?
The recession of 1973-1975 was unusual in that both inflation and unemployment increased at the same time. This suggests that the primary cause of the recession was an
a. inward shift of the aggregate demand curve. b. outward shift of the aggregate supply curve. c. inward shift of the aggregate supply curve. d. outward shift of the aggregate demand curve.
Easy monetary policy ________ interest rates which ________ the demand for a currency and ________ the market equilibrium value of the exchange rate.
A. increases; increases; increases B. decreases; decreases; decreases C. increases; decreases; increases D. increases; increases; decreases
If monopolistically competitive firms earn short-run economic profits, we expect to see
A) new firms enter the industry, which shifts the demand curves of the existing firms to the left until firms earn zero economic profits. B) new firms trying to enter the industry, but unable to do so because of barriers to entry. C) existing firms altering their scale of plant to try to capture larger profits. The combined effect is to cause all firms to earn zero economic profits. D) existing firms increasing prices to try to capture larger economic profits.