Using Figure 1.7, we know the production of 10 units of soda and 2 units of pizza is 
A. undesirable.
B. possible, but only if all resources were fully employed.
C. impossible because we either do not have the resources or the technology.
D. possible, but there would be unemployed resources.
Answer: C
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Suppose a video craze in the United States makes a particular Japanese-produced video game very popular. This would tend to:
a. affect the U.S. balance of payments but not the balance of trade. b. reduce any existing balance of trade deficit in the United States. c. increase the balance of trade deficit of the United States d. increase the balance of trade surplus of the United States.
If Wisconsin cheddar cheese sells for $3.00 per pound in the United States and for 27.90 pesos in Mexico, what is the exchange rate between the dollar and the peso (assuming PPP holds)?
a. $1 = 2.79 pesos b. $1 = 7.90 pesos c. $1 = 9.30 pesos d. $1 = 27.90 pesos
When a government sets limits or puts any restrictions on the international flow of currency or payments, these measures are called:
a. forex regulation and restriction. b. capital controls. c. safeguard measures. d. black-market measures.
Suppose an economy can be described by the consumption function C = 250 + 0.90YD and I = $300. What is the multiplier?
A. 10. B. 0.9. C. 0.1. D. 3.