If ________, net exports are negative
A) imports exceed transfer payments B) imports exceed exports
C) exports exceed transfer payments D) exports exceed imports
B
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Answer the following statement(s) true (T) or false (F)
1. Odds are said to be fair if they reflect the true probabilities of the various states of the world. 2. Risk aversion leads individuals to underinvest from a social point of view. 3. To deal with the problem of adverse selection, insurance companies may limit the amount of insurance that can be purchased at the most favorable odds. 4. An insurance company faces an adverse selection problem when people start taking additional risks after they acquire insurance. 5. A nuclear disaster is an uninsurable risk because it would adversely affect a large number of people simultaneously.
If a monopolistically competitive firm raises its price, it
a. loses all of its customers (sales drop to zero) b. loses some, but not all, of its customers c. loses very few customers d. loses no customers at all e. gains customers (sales increase)
Exhibit 14A-1 Aggregate demand and supply model
Beginning from long-run equilibrium at point E1 in Exhibit 14A-1, the aggregate demand curve shifts to AD2 . The real GDP and price level (CPI) in short-run equilibrium will be:
A. $12 billion and 200. B. $8 billion and 250. C. $8 billion and 150. D. $12 billion and 250.
An invention that raises the future marginal product of capital (in a closed economy) would cause an increase in desired investment, which would cause the investment curve to shift to the ________ and would cause the real interest rate to ________.
A. left; increase B. right; increase C. left; decrease D. right; decrease