In an open economy, aggregate supply consists of domestic production plus imports
a. True
b. False
Indicate whether the statement is true or false
True
You might also like to view...
Under the Bretton Woods system the international reserve currency was the
A) U.S. dollar. B) British pound. C) German mark. D) Japanese yen.
Suppose there is a high inequality in household income between the highest and the lowest income groups in one country. In response, the government raises the income tax for the highest income group and provides subsidies to the lowest-income group
What would happen to the Lorenz curve as a result of the government programs? Explain.
If the economy is on the aggregate supply curve but to the right of the aggregate demand curve, which of the following will be the first market force to lead the economy toward an equilibrium?
a. At the current output level, prices will be too low and firms will increase their prices. b. At the current price level, output will be too low, inventories will diminish, and firms will increase their production. c. At the current output level, prices will be too low and firms will lower their prices. d. At the current price level, output will be too high and so prices will drop so that output will drop. e. At the current price level, output will be too high, inventories will pile up and firms will cut back on their production.
In an attempt to reduce poaching of elephant tusks for ivory, officials in Kenya burned illegally gathered ivory. Economists tend to point out that
a. poaching can be reduced with price supports for ivory. b. the supply of ivory has fallen, leading to an increase in price and reward for poaching. c. burning ivory decreases demand, leading to lower prices and reward for poaching. d. the demand for ivory is higher, leading to an increase in price and reward for poaching. e. burning ivory raises demand, and controlled prices will lead to even greater poaching.