According to the foreign trade effect, when the U.S. price level decreases, U.S. consumers are likely to buy
a. less of all products, both American made and foreign made
b. more American-made products
c. more foreign-made products
d. different American-made products
Answer: b. more American-made products
You might also like to view...
A pure monopoly most likely results in productive inefficiency because at the profit-maximizing level of output ________.
A. MC is not at its minimum level B. P is greater than AVC C. ATC is not at its minimum level D. MR is not zero
In January, 2,500 quarts of ice cream are sold in Boston at $2.50 a quart. In February, 3,000 quarts are sold at $2.00 a quart. This change in quantity sold and price may have been caused by
A. a reduction in wages in the Boston area. B. the introduction of labor-saving automated ice cream-packing machinery. C. the release of a medical study showing that ice cream consumption improves mental health. D. the decision by Boston ice cream sellers to eliminate discount coupons.
The ________ the desired reserve ratio, the ________ the ________ in the quantity of money created from an initial increase of $100,000 in the monetary base
A) smaller; larger; decrease B) larger; larger; decrease C) larger; smaller; decrease D) smaller; larger; increase E) larger; larger; increase
When production in an economy grows more quickly than the population in that economy, which of the following must be occurring?
A) Incomes are growing at a slower rate than the population. B) Real GDP per capita is rising. C) Living standards are falling. D) Real GDP is falling.