The adoption of capital controls makes
A) everyone in the domestic economy better off.
B) some domestic residents better off and some worse off, although on average welfare increases.
C) some domestic residents better off and some worse off, although on average welfare decreases.
D) everyone in the domestic economy worse off.
C
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The scenario in which the dollar plummets in value is called the
a. soft-landing scenario. b. hard-landing scenario. c. fair-trade scenario. d. free-trade scenario. e. cap-and-trade scenario.
Assume a drought in the Great Plains reduces the supply of wheat. Since wheat is a basic ingredient in the production of bread and potatoes are a consumer substitute for bread, we would expect the price of wheat to:
A. fall, the supply of bread to increase, and the demand for potatoes to increase. B. rise, the supply of bread to decrease, and the demand for potatoes to decrease. C. rise, the supply of bread to increase, and the demand for potatoes to increase. D. rise, the supply of bread to decrease, and the demand for potatoes to increase.
A macroeconomic policy action will have a longer-term effect on aggregate demand if people
A. have habit formation in consumption. B. have rational expectations. C. have rational inattention. D. update the way they make decisions frequently.
Positive economics questions "What ought to be?" Normative economics predicts the consequences of alternative actions, answering the questions "What is?" or "What will be?"
Answer the following statement true (T) or false (F)