When is it more expensive for a country to go to war – during a recession or during an economic boom? Explain
What will be an ideal response?
It is clearly more expensive for a country to go to war during an economic boom because it is more likely that the soldiers that will be serving are men and women that are already gainfully employed. Society loses the goods and services that they otherwise could have produced. However, if the country were to go to war during a recession the opportunity cost is lower because in many cases large numbers of new recruits will be drawn from the ranks of the unemployed.
You might also like to view...
During an economic downturn, increased spending on infrastructure repairs is:
A. more costly because the resources needed to complete those projects aren't available. B. a bad idea because there's no need for better infrastructure during an economic downturn. C. less costly because the resources needed to complete those projects would otherwise sit idle. D. a good idea because it will slow the pace of economic recovery.
If substitutes for a good are readily available, the demand for that good
A) does not change substantially if the price rises. B) does not change substantially if the price falls. C) is inelastic. D) is elastic. E) Both answers A and B are correct.
The table above shows how many blouses Katie and Kim will purchase at different prices for a blouse. In the figure, label the axes and put the price on the y-axis and the quantity of blouses on the x-axis. Plot the data for Katie in the figure
Then, plot the data for Kim in the figure.
Suppose expected inflation in the economy is 5%. Banks set nominal interest rates so they'll earn a 2% expected real return. Employers set nominal wages based on a 2% expected real wage increase
Suppose the nominal interest rate and nominal wages are determined this way, but actual inflation turns out to differ from the expected inflation rate. Calculate the actual real interest rate and the percent increase in the real wage for each of the following actual inflation rates: a) 2%; b) 5%; c) 10%.