If the economy of Gwondanaland is growing more rapidly than the economy of Japan, most likely
A. Japan has more current investment than Gwondanaland.
B. Japan has more government spending than Gwondanaland.
C. Japan spends more on capital goods than Gwondanaland.
D. Gwondanaland has lower current consumption than Japan.
E. Gwondanaland has lower current investment than Japan.
Answer: D
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Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real GDP and monetary base in the context of the Three-Sector-Model? a. Real GDP rises and monetary base rises
b. Real GDP rises and monetary base falls. c. Real GDP and monetary base fall. d. Real GDP and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
When price is $100, a monopoly can sell 5 units, and to sell a 6th unit, price must fall to $95 . Which of the following is the monopolist's marginal revenue from selling the 6th unit?
a. -$5 b. $10 c. $50 d. $70
With flexible exchange rates
A. The balance of trade is zero. B. All countries will run either a trade surplus or trade deficit. C. The equilibrium exchange rate is determined in a foreign exchange market. D. Foreign exchange reserves are used to offset balance-of-payment deficits.
A firm that must determine the price-output combination that maximizes profit because it faces a downward-sloped demand curve
A. has a perfectly inelastic demand curve. B. is a price-taker. C. is a price searcher. D. has a perfectly elastic demand curve.