Although trade policies do not affect a country's overall trade balance, they do affect specific firms and industries
a. True
b. False
Indicate whether the statement is true or false
True
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Which one of the following states a central element of the economic way of thinking?
What will be an ideal response?
When the economy is at full employment and inflation is present, the government could create a surplus budget by cutting its own spending and raising taxes. The Fed would be expected to:
A. reduce the required reserve ratio, increase the discount rate, and buy securities on the open market. B. reduce the required reserve ratio, reduce the discount rate, and sell securities on the open market. C. reduce the required reserve ratio, reduce the discount rate, and buy securities on the open market. D. increase the required reserve ratio, increase the discount rate, and sell securities on the open market.
The rocketing prices of imported oil in 1973-1974 and again in 1979-1990 are good exampled of what type of inflation?
What will be an ideal response?
John's utility of wealth curve is shown in the above figure. He currently has wealth of $20,000 and there is a 10 percent chance of losing it all. John is
A) willing to pay any price for insurance. B) willing to pay no more than $2,000 for insurance. C) willing to pay no more than $3,000 for insurance. D) willing to pay $5,000 for insurance.