For the economy as a whole,
a. income must be greater than expenditure.
b. unemployment must rise when GDP rises.
c. expenditure must equal income.
d. consumption must be greater than investment.
c
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Suppose that a haircut in your hometown costs $20, while the price for the same haircut in Mumbai is 600 Indian rupees. At which nominal exchange rate is the dollar price lower for the Mumbai haircut?
A) 0.029$/Rs. B) 20Rs./$ C) 25Rs./$ D) 0.04$/Rs.
When externalities are present in a market, the well-being of market participants
a. and market bystanders are both directly affected. b. and market bystanders are both indirectly affected. c. is directly affected, and market bystanders are indirectly affected. d. is indirectly affected, and market bystanders are directly affected.
Which of the following statements concerning the aggregate demand and aggregate supply model is correct?
a. The aggregate demand and aggregate supply model is nothing more than a large version of the model of market demand and supply. b. The price level and quantity of output adjust to bring aggregate demand and supply into balance. c. The aggregate supply curve shows the quantity of goods and services that households, firms, and the government want to buy at each price. d. The aggregate demand shows the quantity of goods and services that firms are willing to produce at a given price level.
What does each party in international trade anticipate from the exchange?
a. reinforcement of its cultural heritage b. an imbalance in the trade relationship c. improvement in its economic welfare d. deception on the part of its trading partners