In 2012, Country X and Country Y had the same production possibilities, illustrated in the figure above. Country X chose to produce at point A, while country Y chose to produce at point B
In 2018, most likely, Country X will be at point such as ________ while Country Y will be at point such as ________. A) A; B
B) B; A
C) N; Q
D) Q; N
C
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Jessica is a young doctor who has just started her own practice. Her previous position paid her $80,000 a year. For office space, she uses a building which she owns and which she has rented in the past for $40,000 a year
Her total revenue from her new practice is $250,000. She pays $50,000 to other firms for materials and supplies, and she pays $40,000 in wages to her office nurse. Assume that Jessica's building and equipment do not depreciate and that her normal profit is $20,000. a) What is the opportunity cost of all factors of production employed by Jessica? b) What is Jessica's economic profit?
If policy makers wanted to use both monetary and fiscal policy to stimulate demand and reduce a high rate of unemployment, which of the following would be most appropriate?
a. A larger budget deficit and the purchase of securities in the open market by the Fed b. A government surplus and the sale of securities in the open market by the Fed c. A larger government deficit and an increase in the discount rate d. A larger government surplus and a reduction in the discount rate
According to the developing government argument, tariffs imposed by a developing country
A. benefit the country because they represent an efficient mechanism for the country's rulers to obtain funds for their personal use. B. can benefit the country by creating net social gains. C. are likely to represent only a very small fraction of government revenues because the volume of imports in developing countries is relatively small. D. will be as inefficient as tariffs imposed by developed countries.
Which of the following situations is one in which the Fed will potentially pursue expansionary monetary policy?
A) Potential GDP is forecasted to be higher than equilibrium GDP. B) Potential GDP is forecasted to be lower than equilibrium GDP. C) Aggregate demand is growing too fast to keep the economy at full employment. D) Aggregate demand is growing too slowly and the economy is in danger of producing GDP above full employment.