A country in which a significant fraction of domestic production takes place in foreign-owned factories and facilities is most likely a country where
A) GNP is much larger than GDP.
B) GDP is much larger than GNP.
C) GDP is equal to GNP.
D) GDP is not comparable to GDP.
Answer: B
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The following graph is the production possibilities frontier of a nation:
Refer to the graph. The combination "5 drill presses and 2 units of bread" indicates an
A. inefficient combination for the nation. B. ideal combination for the nation. C. efficient combination for the nation. D. unattainable combination for the nation.
President Obama has discussed raising income taxes for individuals earning over $250,000 in income. Explain how these higher income taxes will affect the aggregate demand curve
What will be an ideal response?
A firm in a price-taker market:
a. must take the price that is determined in the market. b. must reduce its price if it wants to sell a larger quantity. c. must be large relative to the total market. d. can exert a major influence on the market price.
Adverse selection refers to when:
A. one party to a transaction has more information than the other and this results in a bargaining dispute. B. one party selects the wrong strategy and they are displeased with their selection. C. one party to a transaction has more information than the other and transactions occur less frequently due to the information asymmetry. D. neither party is willing to be party to a transaction because they don’t have enough information.