Suppose that an Italian working in the United States renounces his Italian citizenship and is granted U.S. citizenship. Which of the following will happen?
A. Italian GDP will fall; U.S. GNP will rise.
B. Italian GNP will fall; U.S. GNP will rise.
C. Italian GDP will fall; U.S. GDP will rise.
D. Italian GNP will fall; U.S. GDP will rise.
Ans: B. Italian GNP will fall; U.S. GNP will rise.
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Vicky currently produces at point a in the figure above. If Vicky moves from point a to point b to point c, her opportunity cost of a modem ________
A) decreases B) increases C) is zero D) remains the same
Which one of the following policies would not reduce water use?
a. Full marginal-cost pricing b. Microirrigation technology c. Reusing wastewater for industrial uses d. Subsidizing irrigation systems e. Removing water subsidies
A sudden change in the normal behavior of inflation, unrelated to the nation's output gap, is called:
A. inflation inertia. B. long-run equilibrium. C. an inflation shock. D. short-run equilibrium.
Assume that the interest parity holds and that the dollar is expected to appreciate against the pound. Given this information, we know that
A) U.S. and U.K. interest rates are equal. B) the U.S. interest rate exceeds the U.K. interest rate. C) the U.K. interest rate exceeds the U.S. interest rate. D) individuals will prefer to hold U.S. bonds because the U.S. interest rate exceeds the U.K. interest rate. E) none of the above