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..." The decrease in exports represents a change in __________ expenditure and will cause __________.
a) induced; a downward shift in AE and a leftward shift in the AD curve
b) autonomous; a downward shift in the AE curve and a leftward shift in the AD curve
c) induced; an upward shift in the AE curve and a leftward shift in the AD curve
d) autonomous; a downward shift in the AE curve and a rightward shift in the AD curve
b) autonomous; a downward shift in the AE curve and a leftward shift in the AD curve
You might also like to view...
Instrumental Variables regression uses instruments to
A) establish the Mozart Effect. B) increase the regression R2. C) eliminate serial correlation. D) isolate movements in X that are uncorrelated with u.
If the unemployment rate has reached an all-time low, the production of output is probably
a. high b. low c. fluctuating d. stable e. inefficient
New firms enter a monopolistically competitive market structure in the long run if the price charged by the existing firms in the short run ________
A) exceeds the average total cost of production B) equals the average fixed cost of production C) equals the average variable cost of production D) equals the price charged in a perfectly competitive market
The table above shows the demand and total cost schedule for a monopolist hotel. What is the marginal revenue from renting out the fifth room each night?
A) $111 B) $141 C) $151 D) $161