Which of the following statements about trade is true?
A. Trade often hurts both parties in the long run.
B. Trade involves a winner and a loser.
C. Trade can benefit both parties.
D. Trade is a zero sum proposition.
Answer: C
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Refer to Table 15-4. Suppose the following table illustrates the values of real and potential GDP and the price level if the Fed does not vote to change their current policy to be more contractionary or expansionary
If the Fed wants to keep real GDP at its potential level in 2017, should the Fed use a contractionary or expansionary policy? How should it conduct open market operations to achieve its goal?
Ordinarily, governments attempt to promote competition in markets. Why do governments use patents to block entry into some markets when this prohibits competition?
A) Politicians sometimes succumb to pressure from lobbyists to grant favors to businesses for political reasons. B) Patents are an important source of government revenue. C) Patents are justified because they are an important means for creating network externalities. D) Patents encourage firms to spend money on research necessary to create new products.
The effect on the IS curve of a reduction in taxes will be less the
A) flatter is the LM curve. B) steeper is the LM curve. C) greater the extent of "crowding out." D) greater is the marginal propensity to save.
As the price of a competitive firm's product rises, the firm's demand for labor also rises
a. True b. False Indicate whether the statement is true or false