The terms of trade are
A) the terms negotiated in a trade agreement.
B) exports plus imports divided by GDP.
C) the value of the real exchange rate.
D) taxes plus transaction costs paid on imports.
E) the ratio of export prices to import prices.
E
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To offset the effect of households and firms deciding to hold less of their money in checking account deposits and more in currency, the Federal Reserve could
A) raise the required reserve ratio. B) buy Treasury securities. C) raise the discount rate. D) lower bank taxes.
The "efficiency wage" is the wage at which
A) employees have no incentive to shirk. B) employees have an incentive to do the optimal (positive) amount of shirking. C) the cost of looking for work is equal to the value of the leisure time for the unemployed individual. D) there is no unemployment. E) there is only frictional unemployment.
A perfectly competitive firm is selling 300 units of output at $4 each. At this output level, total fixed cost is $100 and total variable cost is $500. The firm
A) is maximizing its profit. B) is earning a profit, but not necessarily the maximum profit. C) is experiencing an economic loss. D) should shut down.
Refer to the information provided in Figure 32.1 below to answer the question(s) that follow.
Figure 32.1Refer to Figure 32.1. If the economy is at a point such as C on the Laffer curve, a(n) ________ in tax rates will ________ tax revenue.
A. decrease; decrease B. decrease; increase C. increase; increase D. change; not change