The ratio of the percentage change in consumption of a good divided by the percentage change in income (as measured by GDP) is known as the
A) income elasticity of demand.
B) income expansion path.
C) demand elasticity equivalent.
D) trade effectiveness.
A
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The short-run equilibrium level of real output and the price level are determined by the intersection of the aggregate demand curve and the short-run aggregate supply curve
a. True b. False Indicate whether the statement is true or false
The merchandise trade balance is the value of a nation's:
a. merchandise and service exports plus merchandise and service imports. b. merchandise exports subtracted from capital inflows. c. merchandise imports subtracted from merchandise exports. d. merchandise imports plus net capital inflows.
Most economists in the U.S. believe that the price mechanism leads to
A. an efficient allocation of resources. B. an equitable distribution of income. C. both an efficient allocation of resources and an equitable distribution of income. D. neither an efficient allocation of resources nor an equitable distribution of income.
For the infant-industry argument for tariffs to be appropriate, it is necessary that
A) the industry be deemed essential by the government. B) the government can identify which industries will eventually be able to compete with more established foreign producers. C) only industries that currently are operating efficiently will be protected. D) the country has access to the most modern production techniques.