An open economy is one that trades with other nations in goods and services, and perhaps also trades in financial assets.
Answer the following statement true (T) or false (F)
True
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Using real GDP on the horizontal axis instead of real disposable income implies that a marginal propensity to consume 0.75 generates for every additional $100 of real GDP
A) $25 of additional saving. B) $56.25 of additional consumption spending. C) $25 of additional saving and taxes. D) $75 of additional real disposable income.
Empirical evidence indicates that imposing taxes on polluting emissions by firms
a. has no effect on the amount of pollution emitted. b. does not give the government leeway to regulate more dangerous emissions differently than less dangerous emissions. c. does reduce the amount of pollution emitted. d. discourages firms from investing in new methods of pollution abatement.
During 2017, the rate of inflation was 2 percent. Daniel sold basketballs that year for $16. If Daniel continued to sell basketballs for the same price in 2018, how did the relative price of basketballs change?
a. –2 percent b. –1 percent c. 2 percent d. 1 percent
World output will be maximized when each country pursues its comparative advantage.
Answer the following statement true (T) or false (F)