Suppose there are only 2 nations, Atlantis and Pacifica, and only two goods, surfboards and kayaks. If Atlantis produces only surfboards, it can make 27 per day. If Atlantis produces only kayaks, it can make 18 per day
If Pacifica produces only surfboards, it can make 32 per day. If Pacifica produces only kayaks, it can make 24 per day. After trade begins, ________ will specialize in the production of surfboards and ________ will specialize in the production of kayaks.
A) Pacifica; Atlantis B) Atlantis; Atlantis
C) Atlantis; Pacifica D) No trade will occur.
C
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When the expected inflation rate changes, what happens to the short-run Phillips curve? To the long-run Phillips curve?
What will be an ideal response?
When tax revenues equal government outlays, the situation is referred to as
A) an equivalent budget. B) a balanced budget. C) an equal budget. D) a legal budget. E) an equilibrium budget.
Assume an individual has 14 hours per day for either work or leisure. Using an indifference curve graph, derive an individual's labor supply curve. In your answer, explain what might cause the individual's labor supply curve to eventually bend backwards.
What will be an ideal response?
If planned aggregate spending in an economy can be written as PAE = 15,000 + 0.6Y ? 20,000r, and potential output equals 35,000, what real interest rate must the Federal Reserve set to bring the economy to full employment?
A. 4 percent B. 2 percent C. 3 percent D. 5 percent