Define the term "import."
What will be an ideal response?
An import is a product produced in a foreign country and purchased by residents of the home country.
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Arguments for adopting a policy rule include
A) the time-inconsistency problem can lead to poor economic outcomes. B) discretionary policies pursue overly expansionary monetary policies to boost employment in the short run but generate higher inflation in the long run. C) policy makers and politicians cannot be trusted. D) all of the above.
The presence of pollution in the trucking industry leads in the long run to dynamic inefficiencies because
A) marginal external cost rises over time. B) marginal external cost is constant over time. C) average private cost in trucking is lower than average social cost, so that some trucking firms remain in the industry (or are induced to enter) when efficiency calls for them to leave (or stay out). D) average private cost in trucking is higher than average social cost, so that some firms trucking firms exit the industry when efficiency calls for them to stay (or for more firms to enter). E) fewer resources are devoted to transportation than the economy really needs.
In the markets for the factors of production in the circular-flow diagram,
a. households are sellers and firms are buyers. b. households are buyers and firms are sellers. c. households and firms are both buyers. d. households and firms are both sellers.
Suppose initially the federal budget is balanced. The economy then enters a period of expansion. What is likely to happen to the federal budget?
A. It will show a surplus. B. It will show a deficit. C. It will remain balanced. D. It will automatically stabilize.