A person can benefit from specialization and trade by obtaining a good at a price that is
a. lower than his or her opportunity cost of that good.
b. the same as his or her opportunity cost of that good.
c. higher than his or her opportunity cost of that good.
d. different than his or her opportunity cost of that good.
a
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The nation of Futura has an actual capital-labor ratio which is in steady state. Futura will experience
A) no growth from convergence and the economy will remain on its balanced growth path. B) positive growth from convergence to keep the economy on its balanced growth path. C) positive growth from convergence, but the growth will be less than the balanced growth rate in order to remain on its balanced growth path. D) negative growth from convergence to offset the increase in the balanced growth rate in order to remain on its balanced growth path.
It is true of externalities that they
a. are always detrimental. b. are always beneficial. c. arise when all costs, social and private, are included in production cost. d. cause the price system to misallocate resources.
One of the sources of cyclical unemployment is _____
a. flexible wages b. sticky downward wages c. the constant movement of workers between jobs d. the fundamental changes in the nature of an economy
Assume that business investment spending rises, and the increase is funded by greater borrowing in the capital markets. If the nation has low mobility international capital markets and a fixed exchange rate system, what happens to the real exchange rate and monetary base in the context of the Three-Sector-Model? Assume the nominal exchange rate is stated as: (Foreign currency per Domestic
currency). a. The real exchange rate rises and monetary base falls. b. The real exchange rate and monetary base fall. c. The real exchange rate and monetary base remain the same. d. The real exchange rate falls and monetary base rises e. There is not enough information to determine what happens to these two macroeconomic variables.