As the U.S. economy relies more and more heavily on the production of services rather than goods,
A. Mass unemployment will result.
B. GDP will decrease since there will be less real production.
C. Nearly all future job growth will be in service-producing industries.
D. International trade will become more difficult.
Answer: C
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Borrowing in foreign currencies to spend or invest domestically,
a. decreases demand for the domestic currency, appreciating the domestic currency b. increases demand for the domestic currency, depreciating the domestic currency c. increases demand for the domestic currency, appreciating the domestic currency d. does not affect the exchange rates
We can say that the potential level of real GDP is fixed because the long-run aggregate supply curve is a vertical line
a. True b. False Indicate whether the statement is true or false
The real-income effect shows that
A) a decrease in the price of a good increases the purchasing power of the consumer's income. B) if the consumer's income rises, he or she buys more of inferior goods and less of normal goods. C) if a good is inferior, a decrease in the purchasing power of income results in less of the good being consumed. D) when the price of a good rises, consumers are able to buy more of other goods because of the increase in the purchasing power of income.
Speculators believing cocoa prices are going to be higher next year will
A) buy cocoa futures, cause the expected future price of cocoa to fall, and induce some additional cocoa to be stored for future consumption. B) buy cocoa futures, cause the expected future price of cocoa to rise, and induce some additional cocoa to be stored for future consumption. C) sell cocoa futures, cause the expected future price of cocoa to fall, and induce some additional cocoa to be stored for future consumption. D) sell cocoa futures, cause the expected future price of cocoa to rise, and induce some additional cocoa to be stored for future consumption. E) sell cocoa futures, cause the expected future price of cocoa to fall, and induce greater current consumption of cocoa.