Adam Smith argued that a nation would be wealthier if it engaged in
a. fraud
b. free trade
c. theft of other nations resources
d. genocide
Ans: b. free trade
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If for some reason Americans desired to increase their purchases of foreign assets, then other things the same
a. both the real exchange rate and the quantity of dollars exchanged in the market for foreign-currency exchange would fall. b. both the real exchange rate and the quantity of dollars exchanged in the market for foreign-currency would rise. c. the real exchange rate would rise and the quantity of dollars exchanged in the market for foreign-currency would fall. d. the real exchange rate would fall and the quantity of dollars exchanged in the market for foreign-currency would rise.
One result of adverse selection in the market for used cars is:
A. more lemons (low quality) may be offered for sale than plums (high quality). B. more plums (high quality) may be offered for sale than lemons (low quality). C. few lemons (low quality) are sold. D. no used cars are sold.
An example of final goods in national income accounts would be:
A. New lawn mowers purchased by Cut-Rite Lawn Equipment & Supplies B. Flowers and pots purchased by homeowner Joe Smith C. Chemicals purchased by Green Grass Lawn Care Services D. Seedlings and saplings purchased for resale by Wendy's Garden Center
Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, firms in sector X are now ________ and firms in sector Y are now ________.
A. earning profits; suffering losses B. earning profits; breaking even C. breaking even; breaking even D. breaking even; suffering losses