When net capital flows are negative,
A) capital inflows are less than capital outflows. B) net foreign investment is negative.
C) capital outflows are less than capital inflows. D) A and B are both correct.
A
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_____, the time-inconsistency problem gets eliminated
a. When an inflation or a recession is correctly anticipated b. When lags associated with monetary and fiscal policy are extremely short c. When discretionary macro policy is replaced with fixed policy rules which are well publicized d. When expectations about the economy adjust very slowly e. When the price level in an economy adjusts over time with changes in aggregate demand
The cost of two inputs A and B are $100 and $200 per unit per month. A firm can afford to invest $10,000 per month on these inputs. The firm uses 30 units of A. Given a linear isocost such that the entire budget is exhausted, the firm will use 10 units of B
Indicate whether the statement is true or false
The gravity equation uses a calculation to predict the level of bilateral trade based directly on ____ and inversely on _____.
a. wages; technology b. size of the countries' GDP; the geographic distance between the countries c. the percent of the countries' GDP in manufacturing; their level of tariffs d. the growth rates of the countries' GDP; their openness to trade
A small country is considering imposing a tariff on imported wine at the rate of $5 per bottle. Economists have estimated the following based on this tariff amount: World price of wine (free trade):$20 per bottleDomestic production (free trade):500,000 bottlesDomestic production (after tariff):600,000 bottlesDomestic consumption (free trade):750,000 bottlesDomestic consumption (after tariff):650,000 bottles The imposition of the tariff on wine will cause the surplus of the domestic producers to ________ by about
A. rise; $2.75 million. B. fall; $2.5 million. C. rise; $1 million. D. rise; $500,000.