Suppose Germany's major companies are retailers and Japan's major companies are manufacturers of cheap goods that are sold by Germany's retailers. Which of the following is likely to arise with respect to trade between Germany and Japan?
a. A trade deficit on Germany's side
b. A trade deficit on Japan's side
c. A trade balance between the two countries
d. A trade surplus in both countries
a
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If the Phillips curve represents a "structural relationship," then
A) the Phillips curve will be vertical in the long run. B) the trade-off between unemployment and inflation is permanent. C) the trade-off between unemployment and inflation holds only for the short run. D) the trade-off between unemployment and inflation holds in the long run, but not in the short run.
When the Fed targets interest rates, rightward shifts in the IS curve force the Fed to ________ the money supply to hold to that target, which acts to ________ velocity
A) raise, destabilize B) raise, stabilize C) lower, destabilize D) lower, stabilize
Which of the following statements is INCORRECT regarding the model for information products?
A) Average total costs slope downward, because average variable cost is constant, average fixed cost slopes downward. B) The firm maximizes profit by setting the price of its product equal to marginal cost. C) Marginal cost equals average variable cost. D) In the long run, accounting profit is positive.
Human beings
A) have unlimited wants. B) think they have unlimited wants, but really have limited needs. C) have limited wants, but unlimited needs. D) know what their needs are, but do not know what their wants are.