The market for a particular good is more likely to be local
a. the lower the cost of transporting the good and the greater the ease of communication between buyers and sellers
b. the higher the cost of transporting the good and the greater the ease of communication between buyers and sellers
c. the lower the cost of transporting the good and the greater the ease of determining the good's quality
d. the lower the cost of transporting the good and the more difficult the communication between buyers and sellers
e. the higher the cost of transporting the good and the more difficult the communication between buyers and sellers
E
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When a U.S. firm sells a good abroad for, say, 100 euros (assume $1=1euro), U.S. net exports increase by $100. These $100 in exports can be accounted for as $100 increase in capital outflow because ________
A) if the 100 euros are kept in the foreign bank, the U.S. firm is giving a loan to that bank B) if the U.S. firm uses the 100 euros to buy a share of stock in a foreign firm, the firm is supplying U.S. capital to that foreign firm C) if the U.S. firm uses the proceeds to build a new factory in that country, it is supplying U.S. capital to that country D) all of the above E) none of the above
Suppose that a decrease in the demand for goods and services pushes the economy into recession. What happens to the price level? If the government does nothing, what ensures that the economy still eventually gets back to the natural rate of output?
In a market in which the government has set a price ceiling below the equilibrium price:
A. the quantity demanded will equal quantity supplied. B. there will be excess supply. C. quantity supplied will exceed quantity demanded. D. a black market might develop.
Using Figure 2 above, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE1 might be:
A. wealth level increases. B. interest rates increase. C. domestic income decreases. D. taxes decrease.