Nondepository institutions:
A. do not serve as intermediaries.
B. only transform assets.
C. do not accept deposits.
D. only serve as brokers.
Answer: C
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According to the permanent income hypothesis, a temporary increase in income that does not affect average lifetime income would
A) cause no change in consumption. B) cause a decrease in consumption and saving by the same amount. C) cause an increase in consumption and saving by the same amount. D) cause a large increase in consumption.
The total output produced with any quantity of labor is equal to the sum of the
A) marginal products of each of the workers hired. B) average products of each of the workers hired. C) total wages the firm pays its workers. D) Both answers A and B are correct.
If the U.S. real exchange rate appreciates, U.S. exports to Europe
a. and European exports to the U.S. both rise. b. and European exports to the U.S. both fall. c. rise, and European exports to the U.S. fall. d. fall, and European exports to the U.S. rise.
If nations begin to specialize in production for the purpose of trade,
A. the utility from consumption will increase, but not the total output. B. total world output will increase, as well as well-being from consumption. C. total world output will increase, but well-being from consumption will not. D. neither total output nor well-being from consumption will change. E. the impact on total output and well-being cannot be predicted.