A country has a comparative advantage over another in the production of gadgets if it can produce
A. more gadgets than can the other country.
B. more gadgets than can any other country.
C. gadgets more efficiently than it can produce any other good.
D. gadgets at lower opportunity cost than can the other country.
Answer: D
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In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. Planned aggregate expenditure equals:
A. 320 + 0.25Y. B. 320 + 0.75Y. C. 290 + 0.25Y. D. 290 + 0.75Y.
A bank that has liabilities of $150 billion and a net worth of $20 billion must have:
A. excess reserves of $130 billion. B. assets of $150 billion. C. excess reserves of $150 billion. D. assets of $170 billion.
Suppose there are only two goods (Good A and Good B) and the average person buys 4 of Good A in a year and 3 of Good B. If, in the base year, the Price of Good A is $5 and the Price of Good B is $10, and in the next year the Price of Good A is $6 and the Price of Good B is $9, the inflation that occurred in the second year is
A. 51%. B. 1%. C. 100%. D. 2%.