Some economists believe the economy is self-regulating. What does this mean?
A) It means the economy can remove itself from recessionary and inflationary gaps and produce at Natural Real GDP.
B) It means the economy is always in long-run equilibrium producing Natural Real GDP.
C) It means that inflationary gaps naturally change into recessionary gaps.
D) It means that recessionary gaps naturally change into inflationary gaps.
E) c and d
A
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Big Woods is a lumber firm that sells plywood sheets to local builders. If the annual holding cost of a sheet of plywood is $6 and the managers of Big Woods order 1,000 sheets of plywood, what is the total annual carrying costs of the inventory?
A) $3,500 B) $7,000 C) $3,000 D) $6,00
Any market that we are studying and the markets for the related inputs must all be in equilibrium at the same time. This leads to:
A. simultaneous equilibrium effects. B. partial equilibrium effects. C. general equilibrium effects. D. equilibrium-induced changes.
Gresham's Law:
a. applies only to bimetalism issues. b. applies only to monetary issues in general. c. applies to a wide variety of situations. d. is only understood after taking graduate-level courses.
According to empirical observations, the cost of restricting international trade in the U.S. is much greater than the benefits generated from restriction. In the light of the above observation, which of the following statements is true?
a. The benefits of protecting domestic jobs typically outweigh the costs. b. Consumers end up paying much more for the goods they buy in order to subsidize the relatively inefficient domestic producer. c. U.S. GDP would be over $14 billion higher with import restrictions than without restrictions. d. Protection of the U.S. textile and sugar industries means that all consumers pay a lower price for clothing and sugar. e. Protection of the domestic industries enable the producers to charge lower prices for their products.