If the price level in the United States increases relative to prices in foreign countries, then
A. imports and exports of the United States will increase.
B. imports and exports of the United States will decrease.
C. imports of the United States will decrease and exports of the United States will increase.
D. imports of the United States will increase and exports of the United States will decrease.
Ans: D. imports of the United States will increase and exports of the United States will decrease.
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Figure 33-7
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In Figure 33-7, the case for restrictive monetary and fiscal policy is strongest at point
A. A. B. B. C. C. D. D.
If a firm is earning a normal profit, but zero economic profit, at the point where MR = MC, the firm should
a. shut down b. increase output and decrease price c. increase output and increase price d. decrease output and increase price e. remain at its current level of output
The Japanese economy is stuck in a recessionary gap. The proper fiscal policy could include a(n)
A. decrease in taxes. B. increase in government purchases. C. increase in transfer payments. D. All of the above are correct.
In order for a consumer to choose between two different goods, he has to take into consideration the
A) marginal utility of production. B) marginal utility divided by the price. C) marginal utility plus the price. D) total utility divided by price.