One way to reduce exports is to
A) base trade on comparative advantage.
B) base trade on opportunity costs.
C) trade with poor countries.
D) restrict imports.
D
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If you accept the rational expectations hypothesis as accurate, what would you tell monetary policy makers who ask you how to more effectively manage the economy?
A) Individuals do understand how monetary policy works, so consistency and predictability are the keys to effective policy making. B) Only unanticipated policies will be effective once individuals understand how monetary policy works. C) Consumers do not understand the workings of monetary policy, so discretionary and nondiscretionary policies are equally effective. D) Individuals base their economic expectations solely on current information, so repeating policy decisions that have worked in the past is the most effective path to take.
The problem of a complex tax code filled with loopholes may be overcome by proposing a complete overhaul of the entire system that lowers taxes for everyone because it _____
a. represents a Pareto superior move b. takes advantage of rational ignorance c. benefits all special interests d. a and b
Today's exchange rate system can be described as
a. a fixed exchange rate system b. a freely floating exchange rate system c. a pegged exchange rate system d. a flexible exchange rate system e. a managed float
GDP per capita is a relatively good measurement of:
a. the distribution of income. b. purchasing power. c. household production. d. the standard of living.