The production possibilities curve for the nation of Economagic shifts to the left. This could have been caused by:
a. an increase in Economagic's labor supply.
b. innovation in the production of goods in Economagic.
c. a war that destroyed some of Economagic's resource base.
d. unemployment among Economagic's workers.
e. Economagic's choice of more consumption and less capital last period.
c
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Refer to Figure 9-4. Suppose the government allows imports of leather footwear into the United States. What will the market price be?
A) > $24 B) $24 C) $30 D) $54
Import controls that can help a government maintain a fixed exchange rate, which if left to the foreign exchange market would depreciate, are
a. lowering tariffs and increasing quotas so that more international trade occurs b. raising tariffs and decreasing quotas so that its country's demand for foreign exchange decreases c. requiring exporters to turn over their foreign exchange to the government at a fixed exchange rate d. having the IMF loan the government enough foreign exchange to get through the crisis e. causing a devaluation of the nation's currency so that exports rise and imports fall
What is normal profit? How is it different from accounting profit?
According to the Taylor rule, if inflation equals 4 percent and there is a recessionary gap equal to 4 percent of potential output, the Fed will set a real interest rate of ________ percent and a nominal interest rate of ________ percent.
A. 4; 4 B. 2; 4 C. 1; 5 D. 1; 4