One of the major reasons why the US trade deficit with China has grown in the last 10 years is that
a. the Yuan is seriously undervalued relative to where it would need to be to lead to a zero trade deficit.
b. the yuan is seriously overvalued relative to where it would need to be to lead to a zero trade deficit.
c. currency markets can never bring trade into balance, even in the long run.
d. US productivity has fallen recently.
e. the U.S. has suffered two sharp recessions.
A
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The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. Assuming a fixed cost of entry, the outcome will be that the incumbent
A) deters entry. B) chooses the Stackelberg leader level of output but the potential entrant does not enter anyway. C) chooses the Stackelberg leader level of output and the potential entrant enters. D) deters entry and earns zero profit.
An increase in aggregate supply will cause the price level to:
a. rise and GDP to rise b. rise and GDP to fall. c. rise and the unemployment rate to fall. d. fall and GDP to rise. e. fall and the unemployment rate to rise.
Economists make assumptions in order to
a. mimic the methodologies employed by other scientists. b. minimize the number of experiments that yield no useful data. c. minimize the likelihood that some aspect of the problem at hand is being overlooked. d. focus their thinking on the essence of the problem at hand.
The labor-force participation rate tells us the fraction of the population that has chosen to participate in the labor market
a. True b. False Indicate whether the statement is true or false