Use the following consumption schedule to answer the next question.
At income level 1, the amount of saving is
A. negative.
B. positive.
C. zero.
D. not measurable.
Answer: A
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The two types of trade, intertemporal and pure asset swap ________ perfect substitutes, because ________
A) are; they both offer considerable payoff and are equal in the long run B) are; they both involve the smoothing out of now and future consumption C) are not; asset swapping is immediate and involves only assets, while intertemporal trade takes two time periods and involves both assets and goods/services D) could possibly be; different economic states occur at different points in time E) are not; asset swapping never relates to intertemporal trade
Which of the following does not hinder economic development?
a. low birth rates b. low saving c. lack of infrastructure d. low levels of technology e. the importance of tradition
Holding all else constant, a decrease in the real interest rate on U.S. assets will ________ the demand for dollars in the foreign exchange market and ________ the equilibrium Mexican peso/U.S. dollar exchange rate.
A. increase; decrease B. decrease; increase C. decrease; decrease D. increase; increase
When nations specialize in their areas of comparative advantage and then trade with the rest of the world, the result is that
then trade with the rest of the world, the result is that A) the average standard of living in the world will go down. B) the average standard of living in the world will go up. C) the world will move from a point on the production possibilities curve to a point inside the curve. D) worldwide economic efficiency will decrease.