Free trade refers to the ability:
A) of the developing countries to make payments for imports of goods at the end of every year.
B) to trade without hindrance or encouragement from the government.
C) of the developed countries to set the world prices of most goods and services.
D) of the developed countries to provide financial aid to the developing nations.
B
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A credible policy designed to lower inflation is likely to push the economy into recession
a. True b. False Indicate whether the statement is true or false
Higher than expected inflation rate: a. shifts short-run Phillips curve to the right
b. shifts long-run Phillips curve to the right. c. shifts both short-run and long-run Phillips curve to the right. d. shifts short-run Phillips curve to the left.
Suppose that Family A borrows money when its car breaks down and saves money when the wife receives a holiday bonus from her employer. Suppose that Family B borrows money to buy elaborate birthday presents for the children and spends the husband's holiday bonus on a vacation to Florida. Which of the following is correct?
a. Both Family A's and Family B's spending habits suggest that they base their purchasing decisions on transitory income. b. Family A's spending habits suggest that it bases its purchasing decisions on transitory income rather than permanent income. Family B's spending habits suggest that it bases its purchasing decisions on permanent income rather than transitory income. c. Family A's spending habits suggest that it bases its purchasing decisions on permanent income rather than transitory income. Family B's spending habits suggest that it bases its purchasing decisions on transitory income rather than permanent income. d. Both Family A's and Family B's spending habits suggest that they base their purchasing decisions on permanent income.
A firm will buy monopoly power until the marginal cost of having a monopoly:
A. is more than the marginal benefit. B. is less than the marginal benefit. C. equals the marginal benefit. D. equals the price of its product.