Initially trade between the United States and Canada is balanced. Then, if a change in the exchange rate reduces the U.S. dollar price of Canadian goods, ceteris paribus, we would expect
A. a trade deficit in Canada.
B. a trade surplus in the United States.
C. a trade surplus in Canada.
D. a trade deficit in both countries.
Answer: C
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Which of the following is likely to lead to a right shift in the supply curve of cotton?
A) A rise in labor costs due to wage demands by labor unions B) A decrease in the price of cotton C) An increase in labor productivity due to training programs D) An increase in the price of cotton
Measuring total production by valuing items at their market value allows us to
A) separate the value of different goods with identical prices. B) separate the value of different goods with different prices. C) add together the value of different goods that have different prices. D) add together the value of identical goods that have identical prices. E) ignore the problem that goods and services differ in how long they last.
Macroeconomics is converging with microeconomics because
A) macroeconomic relationships depend on microeconomic behavior. B) macroeconomics studies total output. C) government deficits and unemployment go together. D) inflation means a general increase in prices. E) microeconomic theories are easily testable whereas macroeconomic theories are difficult to test.
Discuss some of the fundamental differences between microeconomics and macroeconomics