Explain how the Federal Government's attempts to control inflation can affect our current account balance
The Fed's attempts to control inflation may lead to higher interest rates in the United States. This will
encourage foreign investment in the United States, and will lead to an increase in the demand for the United
States dollars needed to make these investments. This dollar appreciation will cause exports to fall and
imports to rise, leading to a deficit on our current account balance.
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Which of the following could decrease unemployment and inflation simultaneously?
A) a decrease in oil prices B) contractionary monetary policy C) an increase in the real wage D) expansionary monetary policy
The price of video cassette recorders (VCRs) remains constant, but the market demand curve for VCRs shifts leftward as consumers shift to DVDs and other video technologies
What happens to the consumer surplus in this market as the demand curve shifts? A) Increases B) Decreases C) Remains the same D) We do not have enough information to answer this question.
Suppose Canada can produce 100,000 hockey sticks or 10,000 gallons of maple syrup in a week, while Germany can produce 90,000 hockey sticks or 10,000 gallons of maple syrup in a week. Which of the following conclusions is likely to be made? a. Canada has a comparative advantage in the production of hockey sticks. b. Germany has a comparative advantage in the production of hockey sticks. c
Canada has an absolute advantage in the production of maple syrup. d. Germany has an absolute advantage in the production of maple syrup.
For a firm, the production function represents the relationship between
a. implicit costs and explicit costs. b. quantity of inputs and total cost. c. quantity of inputs and quantity of output. d. quantity of output and total cost.