A reduction in a country's rate of inflation should
A) increase its imports.
B) increase its exports.
C) lead to a negative trade balance.
D) lead to an outflow of SDRs.
Answer: B
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During an economic downturn, Keynes argued that firms would have ________ to increase spending because ________.
A. no incentive; interest rates would be too high. B. no incentive; they already had enough capacity to meet demand. C. a strong incentive; interest rates would be too high. D. a strong incentive; they wouldn't have enough capacity to meet demand.
Refer to Table 6-3. Over what range of prices is the demand elastic?
A) between $8 and $16 B) between $14 and $16 C) over the entire range of prices D) between $2 and $8
At any given airport, the airlines hold long-term leases for passenger loading gates. New gates cannot be added without approval of the airlines. Frequent flier programs are also common in the industry. It is, therefore, more difficult for a new airline to enter a given airport (market). Such factors: (i) are called barriers to entry. (ii) tend to decrease the contestability of the air travel market.
A. i and ii B. i not ii C. ii not i D. neither i nor ii
Suppose that, a country with a closed economy opens itself to international trade and becomes a net exporter. In that case, the price of that good will ________ when the economy goes from closed to open for trade.
A. decrease B. first decrease then increase C. increase D. stay the same