If the initial distribution of labor and capital is Pareto optimal, which of the following statements is TRUE?
A) It is possible to reallocate labor and capital across industries so as to increase the production of one good without decreasing the production of another good.
B) It is possible to reallocate labor and capital across industries so as to increase the production of one good, but only by reducing the production of another good.
C) It is possible to reallocate labor and capital across industries so as to increase the production of every good.
D) none of the above
B
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The demand for dollars in the foreign exchange market will decrease and hence the demand curve for dollars will shift leftward if
A) the U.S. interest rate differential decreases. B) the expected future exchange rate rises. C) the exchange rate for the dollar rises. D) the U.S. interest rate differential increases.
One type of financial intermediary now rising in relative importance is
A) pension funds. B) banks. C) savings-and-loan associations (S&Ls). D) life insurance companies.
The course of international monetary policy is directed primarily by the
a. Federal Reserve. b. World Bank. c. International Monetary Fund. d. leaders of the Group of Seven nations.
Results of the study done by Lee Benham on advertising for eyeglasses would suggest that
a. brand loyalty and market power in the eyeglass market was likely to be more pervasive in states that allowed advertising. b. eyeglass sales were more profitable in states that allowed advertising. c. optometrists would not be supportive of advertising restrictions. d. optometrists would enthusiastically endorse advertising restrictions.