Professor Daniel Trefler at the University of Toronto concluded that Canada ________ from free trade with the United States because _______________.
a. gained; trade creation exceeded trade diversion with the United States
b. lost; trade diversion exceeded trade creation with the United States
c. first gained, then lost; trade diversion exceeded trade creation after NAFTA was fully implemented
d. neither gained nor lost; trade creation equaled its trade diversion with the United States
Answer: a. gained; trade creation exceeded trade diversion with the United States
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Assuming all else equal, if households are optimistic about their future income, it is likely to cause a(n):
A) downward movement along their credit demand curve. B) upward movement along their credit demand curve. C) leftward shift of their credit demand curve. D) rightward shift of their credit demand curve.
Define equilibrium as it relates to markets. Describe the process by which a market reaches a new equilibrium. Include an appropriate diagram.
What will be an ideal response?
If the MPS = 0.25, and intended investment falls from $100 to $75, national income will decrease by
a. $25 b. $75 c. $150 d. $125 e. $100
Suppose OPEC succeeds in raising world oil prices by 300 percent. This price increase causes inventors to look at alternative sources of fuel for internal-combustion engines. A hydrogen-powered engine is developed which is cheaper to operate than gasoline engines. Which problems in the construction of the CPI does this situation represent?
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