Suppose a country attempts to be self-sufficient and doesn't trade with any other countries. From an economic perspective, citizens of this nation can be expected to
a. gain materially from this policy because they can consume more goods over time than if they engaged in trade with foreigners.
b. produce less total value than they could if they specialized and engaged in trade with other nations.
c. gain from more rapid growth since home markets are reserved for home producers.
d. be just as well off without trade since the value of what is sent to other nations in trade just equals the value of what is received in trade.
B
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If the Fed wants to maintain current interest rates, it would be buying government bonds in the open market when ________.
A. investment demand decreases B. the demand for money increases C. the demand for money decreases D. investment demand increases
The original Federal Reserve Act
A) specified open market operations as the Fed's main policy tool. B) specified open market operations as one of several Fed policy tools. C) specified that open market operations be employed by the Fed only in circumstances where discount loans were ineffective. D) did not specifically mention open market operations.
To simplify our consumption models, suppose U.S. consumers only purchase food and all other goods where food is plotted along the horizontal axis of the indifference map
Also, suppose that all states initially impose state sales taxes on all goods (including food), but then the states exempt food from the state sales tax. How does this tax policy change alter the consumer's budget line? A) Makes the budget line steeper B) Makes the budget line flatter C) Parallel rightward shift D) Parallel leftward shift E) none of the above
Marginal revenue (MR) is ____ when total revenue is maximized
a. greater than one b. equal to one c. less than zero d. equal to zero e. equal to minus one