Mauritius, an island off the coast of Africa, competes with other countries producing goods with low-skilled labor. In 2006, it was reported that its "...factories have been exposed to ... competition from China, India, and other Asian mass producers." As a result, "the main export industry has seen a 30% reduction in volume..." Suppose real GDP is $14 billion, exports total $2 billion and the multiplier is 4. If exports decline by $600,000,000, real GDP in Mauritius will:
a) increase by $2.4 billion
b) decrease by $2.4 billion
c) decrease by $8 billion
d) increase by $4 billion
b) decrease by $2.4 billion
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Which of the following is not an incentive bureaucrats have to increase the size of their budgets?
a. They can increase their income by having a higher budget. b. Increased budgets mean more power and prestige. c. Higher budgets are necessary to maximize scale efficiencies. d. A nice working environment is positively correlated with a higher budget.
Refer to the given data. The marginal propensity to consume is:
A. .25.
B. .75.
C. .20.
D. .80.
In Figure 3-2, a point such as A
A. is preferable over B. B. is an efficient use of resources. C. represents a misallocation of resources. D. is not obtainable.
In the first quarter of 2009, the United States trade deficit fell to its lowest level in a decade. This means that
A) the United States imported more from the rest of the world than it exported to the rest of the world. B) foreign countries exported more to the United States than they imported from the rest of the world. C) foreign countries imported more from the United States than they exported to the United States. D) the United States exported more to foreign countries than it imported from the rest of the world.