Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the current international transactions balanceand monetary base in the context of the Three-Sector-Model?
a. The current international transactionsbalance becomes more positive
(less negative) and monetary base rises.
b. The current international transactionsbalance becomes more negative (less positive) falls and monetary base falls.
c. The current international transactionsbalance becomes more negative (less positive) and monetary base rises.
d. The current international transactionsbalance and monetary base remain the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
.C
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National output and national income are the same because
A) one seller's profit is another seller's loss. B) one seller's profit is another buyer's loss. C) the sale of goods and services generates income for the sellers. D) the sale of goods and services generates tax revenues for the government.
Suppose angioplasty and coronary artery bypass graft (CABG) surgery are substitute treatment alternatives for coronary artery disease. What should happen to the equilibrium price and quantity of angioplasty procedures if a new CABG technique is introduced that is less invasive (requiring a 4 inch incision under the breast bone rather than cracking open the patient's rib cage) and requires
one-third the recovery period of regular CABG surgery. a. Both price and quantity will increase. b. Both price and quantity will decrease. c. Price will increase and quantity will decrease. d. Price will decrease and quantity will increase. e. The introduction of a new CABG procedure should have no effect on the price or quantity of angioplasty procedures.
Which of the following experiments will yield observations that would allow one to calculate the marginal physical product of labor?
a. increase the number of lumberjacks with chain saws and observe the change in output of cut trees b. increase the number of workers on an assembly line and record the change in output c. Both a and b are correct. d. Neither a nor b are correct.
If demand were perfectly elastic, there would be no excess burden.
Answer the following statement true (T) or false (F)