The trade deficits of the 1980s and 1990s reflects American desire for foreign
a. assets and foreign desire for American goods and services.
b. goods and services and foreign assets.
c. goods and services and foreign desire for American assets.
d. assets now and foreign goods and services in the future.
c
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Consider a firm operating with the following: price = 10; MR = 10; MC = 10; ATC = 10 . This firm is:
a. making an economic profit of 10. b. an example of monopolistic competition. c. going to go out of business in the long run. d. a monopolist for a product with a relatively inelastic demand. e. perfectly competitive in long-run equilibrium.
A conclusion of the theory of rational expectations is that, in the short run, the impact of discretionary fiscal policies designed to shift the AD curve will:
a. result in no net change in AD once people's expectations adjustments have been accounted for b. shift AD in the opposite direction intended once people's expectations adjustments have been accounted for. c. be anticipated and compensated for, causing no significant effect on real GDP or employment if people's anticipations are correct. d. have to be anticipated to change real output in the intended direction.
On which of the following assets are you most likely to earn interest income?
a. cash and currency b. checkable deposits c. money market deposit accounts d. gold and other precious metals e. All of the above are correct.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1. B. P2 and Y1. C. P2 and Y3. D. P1 and Y2.