Assume that the supply curve is horizontal because marginal cost is constant at $10. If John, Robert, and Jimmy each value one compact disc at $20 but only Jimmy values a second compact disc, then the total value in this market is $35 if
a. Jimmy’s value for a second compact disc is $0.
b. Jimmy’s value for a second compact disc is $5.
c. Jimmy’s value for a second compact disc is $10.
d. Jimmy’s value for a second compact disc is $35.
b. Jimmy’s value for a second compact disc is $5.
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A) aggregate demand increases and potential GDP decreases. B) aggregate demand decreases and aggregate supply decreases. C) aggregate supply decreases and aggregate demand increases. D) aggregate supply increases and aggregate demand increases. E) None of the above answers is correct.
If firms and households form their expectations about inflation by looking at past inflation, this form of expectations formation is known as ________ expectations
A) adaptive B) forward-looking C) rational D) perfect
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a. save good paying jobs. b. neither create nor destroy jobs; they reallocate them. c. increase employment in the domestic industries that are most productive. d. reduce imports, without affecting the volume of exports.
Ann, a U.S. citizen, uses some previously obtained euros to purchase a bond issued by a Spanish company. This transaction
a. increases U.S. net capital outflow by more than the value of the bond. b. increases U.S. net capital outflow by the value of the bond. c. does not change U.S. net capital outflow. d. decreases U.S. net capital outflow.