Use the following production possibilities tables to answer the next question.Germany's Production Possibilities ABCDEFAutos (millions)048121620Chemicals (millions)4032241680United States' Production Possibilities ABCDEFAutos (millions)03691215Chemicals (millions)60483624120Suppose that each nation specializes in producing the product for which it has a comparative advantage, and the terms of trade are set at 3 units of chemicals for 1 unit of autos. In this case, Germany could obtain and consume a maximum combination of 8 million units of autos and
A. 24 million units of chemicals.
B. 36 million units of chemicals.
C. 48 million units of chemicals.
D. 12 million units of chemicals.
Answer: B
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Suppose a country institutes an investment tax credit and that leads to an initial increase in investment spending of $100 billion. Suppose the multiplier is 1.5 and the economy's real GDP is $5,000 billion. This action is
A) expansionary and will shift the aggregate demand curve to the right by $750 billion. B) expansionary and will shift the aggregate demand curve to the right by $150 billion. C) expansionary and will shift the aggregate demand curve to the left by $7500 billion. D) expansionary and will shift the aggregate demand curve to the left by $150 billion.
Which is not true of price discrimination?
A. Successful price discrimination implies that the producer can separate customers into easily identifiable groups. B. Successful price discrimination will provide the firm with more profit than if it does not discriminate. C. Successful price discrimination will generally result in a lower level of output than would be the case under a single-price monopoly. D. It exists when price differences depend critically on different buyers' evaluations of a product.
If the demand for KFC chicken is price inelastic, a fall in the price of KFC chicken will raise the total revenue
Indicate whether the statement is true or false
The bank rate is the interest rate charged by the commercial banks to its borrowers
a. True b. False Indicate whether the statement is true or false