Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and current international transactions in the context of the Three-Sector-Model?
a. The GDP Price Index rises, and current international transactions become more negative (or less positive).
b. The GDP Price Index rises, and current international transactions become more positive (or less negative).
c. Real GDP Price Index falls, and current international transactions rises.
d. There is not enough information to determine what happens to these two macroeconomic variables.
e. The GDP Price Index falls, and current international transactions remain the same.
.C
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Is there any difference between fining people who put contaminants into the atmosphere and charging fees for putting contaminants into the air?
A) Not if the fee and the fine are the same per quantity of contaminant. B) Not if the fee per quantity of contaminant is the same as the fine multiplied by the probability of "getting caught." C) Only in the language or rhetoric, but not in the incentives the laws create. D) Yes, because a fee constitutes social authorization while a fine expresses social disapproval.
Today's industrialized economies
a. have always specialized in capital intensive production b. have always specialized in heavy industry c. began their industrialization in labor intensive production d. began their industrialization in heavy industry then moved into light industry e. none of the above
If government spending and tax collections both increase by the same amount, then according to the classical loanable funds market:
a. the demand for loanable funds will increase and the interest rate will rise. b. the demand for loanable funds will fall and the interest rate will rise. c. savings will rise and interest rates will fall. d. nothing will shift and the interest rate will remain constant. e. none of the above.
Economists believe:
A. every choice has a sunk cost. B. only some choices have an opportunity cost. C. every choice has an opportunity cost. D. sunk costs are a figment of most people's imagination.