The Marshall-Lerner condition is less likely to hold when
A) imports and exports are very price-sensitive.
B) the trade deficit is large.
C) the marginal propensity to consume is very large.
D) the marginal propensity to consume if very small.
E) none of the above
E
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If two countries are economically identical except that there is significant air and water pollution in one, then the level of GDP:
A. will be the same in both countries. B. will be higher in the country with no pollution. C. will be greater than the level of economic well-being in each country. D. will be higher in the country with pollution.
Who makes investment decisions in most modern industrial societies? Discuss the roles played by firms, households, and the capital market
What will be an ideal response?
Which of the following statements is true?
a. Marginal revenue product is the extra revenue generated to the firm from the production of one more unit of output. b. Marginal factor cost is the extra cost to a firm of employing one more unit of a factor of production. c. The demand curve for a perfectly competitive employer is horizontal at the market wage rate. d. The supply curve of labor is upward sloping because of the law of diminishing marginal productivity.
Which of the following is most likely to lead to an increase in the demand for U.S. dollars in the foreign exchange market?
a. U.S. firms purchasing raw materials from Japan b. U.S. speculators expecting the value of the German mark to rise c. The Fed intervening in the foreign exchange market and devaluing the dollar d. Speculative outflows of money from the United States to Britain because of higher interest rates in Britain e. Japanese cars becoming more popular in the United States