What can one learn from the following figure?
What will be an ideal response?
The figure shows the U.S. current account and net foreign wealth from 1977 until 2008. It shows that a string of current account deficits in the 1980s reduced America's net foreign wealth until, by the end 2008, the country had accumulated a substantial net foreign debt. In 1987 the country became a net debtor to foreigners for the first time since World War I.
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Consider a perfectly competitive market experiencing good times. In the short run, the equilibrium price will ________ and firms will earn a(n) ________
A) increase; economic profit as the new price exceeds average total cost B) increase; normal profit as the new price exceeds average total cost C) decrease; economic loss as new firms enter the industry D) decrease; economic profit as firms exit the industry E) may increase or decrease; normal profit depending on their costs
If society allows firms to freely pollute the environment, then which of the following is true?
a. Market equilibrium output will be equivalent to the efficient output level. b. Market equilibrium output will be too low relative to the efficient output level. c. Market equilibrium output will be too high relative to the efficient output level. d. The efficient output level can be achieved by giving firms a subsidy for the pollution they generate.
Paper money in the United States is
A. backed by gold in Fort Knox. B. partially backed by gold and silver. C. entirely fiat money. D. fully convertible into gold at fixed prices.
Imports are goods and services bought domestically
A) and resold at a profit. B) and not subject to tariffs. C) and produced domestically. D) but produced in other countries.