When income levels in the home nation increase, what is the effect on the home TB?
a. It decreases because of expenditure switching.
b. It decreases because of an increase in imports.
c. It increases because of an increase in exports.
d. It increases because of expenditure switching.
Answer: b. It decreases because of an increase in imports.
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Indicate whether the statement is true or false
According to the World Bank definitions, there are more people in the world living in extreme poverty than there are living in severe poverty.
Answer the following statement true (T) or false (F)
Suppose Canada has a population of 30 million people and a labor force participation rate of 2/3. Furthermore, suppose the natural rate of unemployment in Canada is 7%. If the current number of unemployed people is 1.4 million people, what can we conclude about Canada's economy?
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If price is less than average fixed costs, a. the firm should operate, since it is making economic profits
b. the firm should operate in the short run, but it is making economic losses. c. the firm should shut down in the short run. d. We do not know whether a firm should continue operating or not.