Externalities occur when a transaction directly impacts all the people involved in the transaction
a. True
b. False
Indicate whether the statement is true or false
False
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Suppose iPhones cost 180 euros and 240 dollars in Belgium and the United States, respectively, while binoculars cost 60 euros and 75 dollars in Belgium and the United States, respectively
If the exchange rate is 0.75 euros/dollar, the law of one price ________ for iPhones and ________ for binoculars. A) holds; holds B) does not hold; holds C) does not hold; does not hold D) holds; does not hold
Too much of society’s scarce resources are used to produce goods in monopoly markets.
Answer the following statement true (T) or false (F)
Exhibit 17-2 Aggregate demand and aggregate supply curves
As shown in Exhibit 17-2, if people behave according to adaptive expectations theory, an increase in the aggregate demand curve from AD1 to AD2 will cause the economy to move:
A. directly from E1 to E3 and then remain at E3. B. directly from E1 to E2 and then remain at E2. C. from E1 to E2 initially and then eventually move back to E1. D. from E1 to E2 initially and then eventually move to E3.
Proponents of the WTO argue that free international trade and investment will:
A. reduce economic growth rates in the industrial economies. B. reduce employment in developing nations. C. eliminate world poverty. D. increase living standards of all trading nations.