For this question, assume that the Marshall-Lerner condition does not hold. A reduction in the real exchange rate will tend to cause which of the following to occur?
A) a reduction in NX and a reduction in foreign output (Y)
B) a reduction in NX and an increase in domestic output (Y)
C) an increase in NX and a reduction in Y
D) an increase in NX and an increase in Y
E) none of the above
A
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U.S. Gross National Product includes goods produced by:
A. foreign firms on U.S. soil. B. U.S. firms on foreign soil. C. foreign firms on foreign soil. D. None of these statements is true.
The value of exports minus the value of imports is called the:
A. trade value. B. net budget balance. C. balance of trade. D. net trade value.
Students who go to college when they are younger face a lower opportunity cost of education because
A. younger people are willing to live at a lower standard of living with less expensive housing and other goods. B. younger people find it easier to learn, so going to college does not take as much effort as it does for someone who is older. C. younger people can borrow money for college, and older people cannot. D. wages are lower for younger people, so they are giving up less in earnings when they spend time in school.
A good economic model has
A) testable predictions. B) absence of assumptions. C) extreme simplifications. D) ambiguous predictions.