If part of the labor force is unemployed, the foregone goods and services are
A. lost until the unemployed find jobs.
B. are replaced by unemployment insurance.
C. are lost forever.
D. are replaced by an equal amount of imports.
Answer: C
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The trade-off between the present and future consumption is measured by
A) the money cost of both the present and future consumption. B) the foregone present consumption. C) the difference between the money price of future goods and the money cost of producing them. D) the difference between the money price of present goods and the money cost of producing them.
Toyota (a Japanese-based company) produces Tundras in the state of Texas. In which country’s GDP is it included?
A. Japan and the United States B. Japan because Toyota is a Japanese company C. The United States because that is where it was produced D. Neither country because it is sold internationally
Great Britain opted out of the ERM in 1992 because its government concluded that:
A) it wanted to increase its trade with North America rather than Europe. B) the gains from being a member of the ERM outweighed the costs from higher German interest rates. C) the costs associated with higher German interest rates outweighed the gains from being a member of the ERM. D) it was unable to agree with the French on an exchange rate between the pound and the French franc.
Higher interest rates tend to
A. make it less costly for people to buy houses and cars. B. increase the quantity demanded of goods and services. C. reduce the total planned spending on goods and services. D. lower the costs of building new plants and equipment.