The income of a resource whose supply is fixed is entirely economic rent
a. True
b. False
A
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Refer to Table 2-12. If the two countries specialize and trade, who should export sailboats?
A) There is no basis for trade between the two countries. B) Guatemala C) They should both be importing sailboats. D) Honduras
The behavior of the M1 velocity of money in recent years can be explained by: a. stability of interest rates
b. a low and stable rate of inflation. c. monetary policy that has been successful in stabilizing the economy. d. financial innovation creating new substitutes for M1 money. e. a large number of banks and savings and loan associations going bankrupt.
Throughout history many governments have financed government operations with the printing press, and paying government bills by increasing the money supply. The United States followed this path during the Civil War, approximately doubling the U.S. money
supply between 1860 and 1865 using paper fiat money called Greenbacks. What do you think this rapid increase in the money supply did to inflation and inflationary expectations? Suppose the economy was in long-run equilibrium by the end of the war and the government began to remove Greenbacks and reduce the money supply. Use your understanding of the Phillips curve relationship to explain the effect on the economy.
The idea behind reciprocity between two trading countries is that they
a. share the gains from trade equally b. eliminate quotas against each other c. eliminate tariffs against each other d. use the same set of trading practices with respect to each other e. agree to retaliate against other trading countries