During recessions which type of spending falls?
a. consumption and investment
b. investment but not consumption
c. consumption but not investment
d. neither consumption nor investment
a
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Two countries will have zero incentive to trade if their production possibilities curves are parallel straight lines because
A. The opportunity costs for both countries are the same. B. One country has a comparative advantage in the production of both goods, thus providing that country with no incentive for trade. C. An intersection of the two lines is not possible, and therefore a trade equilibrium is not possible. D. One country has an absolute advantage in the production of both goods, thus providing that country with no incentive for trade.
If a currency union provides more to its members than a common currency unit, such as fiscal transfers or fiscal federalism, it would make joining that union:
A) less costly. B) more beneficial. C) yield higher net benefits. D) less costly, more beneficial, and yield higher net benefits.
In economic terminology, an inferior good is a good
A) that no one will purchase. B) that doesn't work properly. C) that has no monetary value. D) for which demand increases as income decreases.
Which of the following best represents the effect of an increase in investment?
A.
Moving from point a to point b
B.
Moving from point d to point c
C.
Moving from point a to point c
D.
Moving from point b to point d