Why do opportunity costs primarily differ among nations?
What will be an ideal response?
Nations have different endowments of land, labor skills, capital, and technology.
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One of the main reasons for increasing income inequality in the United States is __________.
a. contraction in international trade
b. rapid technological change
c. an increase in white collar crimes
Keynesian economics predicts that if government policy makers deem current equilibrium real Gross Domestic Product (GDP) to be "too low," then an appropriate policy action would be to
A) do nothing, because the economy is self-adjusting. B) raise government spending, thereby increasing aggregate demand and pushing up real Gross Domestic Product (GDP) with little or no inflationary consequences. C) increase taxes, thereby causing aggregate demand to increase and inducing a rise in real Gross Domestic Product (GDP) with little or no inflationary consequences. D) reduce the money stock, thereby causing aggregate demand to decrease and inducing a rise in fall in the price level that generates an increase in total planned expenditures.
An intertemporal budget constraint
A) requires the present value of consumption to be equal to the present value of production. B) requires total spending in each period to be equal to total consumption in each period. C) does not take into account the ability to borrow or loan goods domestically. D) categorizes income into permanent and temporary income. E) limits consumption to the amount produced in each time period.
An overall decline in communication and transportation costs have facilitated global interactions in the twentieth and the twenty first century
a. True b. False Indicate whether the statement is true or false