If the opportunity cost of producing cheese is higher in Greece than it is in Italy, then:
A. Greece should specialize in producing cheese.
B. Italy should specialize in producing cheese.
C. both Greece and Italy should produce cheese.
D. Greece gives up fewer goods to produce cheese than Italy does.
Answer: B
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During an economic downturn, Keynes argued that businesses would:
A. not increase spending because of the sharp rise in interest rates. B. not increase spending even if interest rates fell all the way to zero. C. increase spending because interest rates would fall to zero. D. increase spending because of the sharp rise in interest rates.
In 2004, hurricanes damaged a large portion of Florida's orange crop. As a result of this, many orange growers were not able to supply fruit to the market
If, following the hurricane, the price remained at its pre-hurricane level, we would expect to see A) a surplus of oranges. B) a shortage of oranges. C) an increase in the demand for oranges. D) the quantity demanded equal to the quantity supplied.
Suppose you purchase a $1,000 bond that bears an interest rate of 10 percent. What will happen if the interest rate goes to 20 percent?
A. The market price of the bond will increase to $2,000. B. The market price of the bond will drop to $500. C. The return on the bond will double. D. The return on the bond will halve.
The Great Recession of 2007–2009 and the financial crisis of 2008 increased the budget deficit because of: a. an increase in the tax rates for high-income households
b. a sudden increase in terrorist attacks and anthrax scares in the economy. c. low interest rates that crowded out private investment. d. discretionary tax cuts and greater outlays on unemployment benefits. e. greater outlays on national defense spending.