When Americans buy Mercedes-Benz automobiles made in Germany, they are generating a
A. Demand for U.S. dollars and a supply of a foreign currency.
B. Demand for U.S. dollars and a demand for a foreign currency.
C. Supply of U.S. dollars and a demand for a foreign currency.
D. Supply of U.S. dollars and a supply of a foreign currency.
Answer: C
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The income effect of an increase in the price of salmon
A) refers to the effect on a consumer's purchasing power which causes the consumer to buy less salmon, holding all other factors constant. B) is the change in the demand for salmon when income increases. C) refers to the relative price effect—salmon is more expensive compared to other types of fish—which causes the consumer to buy less salmon. D) is the change in the demand for other types of fish, say trout, that results from a decrease in purchasing power.
Employers choose to offer efficiency wages because:
A. they give employees an incentive to work hard to keep their jobs. B. it will reduce turnover, saving the employer time and money to hire and train new workers. C. it has proven to make workers more productive. D. All of these are true.
When people speak of the labor force participation rate, they are actually talking about the percentage of
a. people not working but actively seeking work. b. people who are working. c. new entrants into the labor force. d. working-age people who are either working or seeking work.
Refer to the graph shown. Given the production possibility curve, the opportunity cost of reading 2 more articles when you are already reading 11 articles is on average:
A. 2 albums per article. B. 3 albums per article. C. 1/2 album per article. D. 2/3 album per article.