Suppose the production function is Q = min{3K, L}. How much output is produced when 6 units of labor and 3 units of capital are employed?
A. 9
B. 3
C. 6
D. None of the statements is correct.
Answer: C
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A nation should only import those goods for which it has
a. lower opportunity costs than its trading partner b. higher opportunity costs than its trading partner c. zero transaction costs d. lower costs of production than its trading partner e. absolute advantage in production compared to its trading partner
If the government borrows money to finance additional spending when the economy is operating at full capacity, then we would expect
A. interest rates to rise and prices to fall. B. interest rates to fall and prices to rise. C. neither interest rates nor prices to rise. D. both interest rates and prices to rise.
Which of the following statements is true?
a. Foreigners owned $16.30 in U.S. assets b. U.S. residents owned $13.8 trillion in foreign assets c. U.S. residents owned $2.5 trillion more assets in the United States than foreigners owned abroad d. Foreign purchases of assets in the U.S. subtract from America's productive capacity e. Income from foreign-owned assets in the U.S. flows to Americans
The purpose of the IMF is to:
A. provide developing countries with short-term loans and technical assistance. B. determine monetary and fiscal policy in developing countries. C. determine exchange rates for developing countries. D. buy and sell the currencies of developing countries in order to stabilize their value.