Since countries differ in the amount of economic activity that is transacted in organized markets,
A. some countries are more productive than others.
B. persons live better in some countries than others.
C. international comparisons of per capita GDP are often misleading.
D. comparisons between countries are totally impossible.
Answer: C
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Suppose there currently is an inflationary gap. What could the government do to bring the overall price level down?
A) nothing B) Reduce government spending. C) Increase government spending. D) Reduce the nation's aggregate supply.
When the price level falls
a. The interest rate falls because people will want to hold more money and so sell bonds. b. Firms will want to spend more on new business buildings and business equipment and households will want to spend more building new homes. c. Both A and B are correct. d. None of the above are correct.
The marginal cost of investment for the firm is equal to
A) 1. B) -1. C) MP'K. D) -MP'K.
Why does each of the following facilitate the creation and stability of a cartel?
a. High barriers to entry b. An identical product c. Similar costs