Which of the following is the best example of capital?
A. a family buying a newly produced home
B. a shoe store adding to its inventories
C. a ship used to carry oil across the ocean
D. the production and sale of a new delivery van for UPS
Ans: C. a ship used to carry oil across the ocean
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Compared to an economy's self-correcting mechanism, active contractionary fiscal policy will
a. work more slowly and calmly. b. work more quickly. c. have less deflationary effects. d. have a smaller effect on real GDP.
Games:
A. will always have several stable outcomes. B. are always zero sum. C. will always have a dominant strategy. D. None of the above are true.
It's not likely that a country will specialize completely in one good even if it has a lower opportunity cost because
A. Comparative advantage is not a workable concept in the world economy. B. Opportunity costs increase as more of a good is produced. C. The country would end up inside its production possibilities curve. D. The country would want to save some of the good for its own citizens.
Suppose that the quantity of cars supplied exceeds the quantity of cars demanded. We would expect that:
A. the price of cars will increase. B. the price of cars will decrease. C. the supply will increase (supply will shift to the right) to meet the demand. D. the demand will decrease (demand will shift to the left) to meet the supply.