Refer to the information provided in Figure 2.1 below for the economy of Macroland to answer the question(s) that follow.
Figure 2.1Refer to Figure 2.1. The shape of Macroland's production possibility frontier shows
A. random opportunity costs.
B. constant opportunity costs.
C. decreasing opportunity costs.
D. increasing opportunity costs.
Answer: D
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When supply is written as Q = c + dP and P and Q are the equilibrium values for price and quantity, which of the following is the value of the price elasticity of supply, ES?
A. -c/d B. c(P/Q) C. -d/c D. d(P/Q)
A sudden stop will be easier to navigate if the country borrows internationally in foreign currencies and lend locally in its domestic currency
Indicate whether the statement is true or false
If prices in the New Keynesian model were perfectly flexible, then
A) there would be a role for monetary policy. B) the output gap would be positive. C) the equilibrium real interest rate would be the natural rate of interest. D) the output gap would be negative.
A photograph processing machine company requiring customers who buy a processing machine to purchase chemicals and photographic paper from it is an example of
A) bundling. B) a requirement tie-in sale. C) quantity discrimination. D) a two-part tariff.