Sugarcane can be used to produce both granulated sugar and ethanol. Recent regulations in certain countries now permit a higher amount of ethanol to be added to gasoline. An economist would expect sugarcane prices to ____, and quantity sold to ____.
A. rise; rise.
B. fall; fall.
C. rise; fall.
D. fall; remain the same.
Answer: A
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If the economy's real GDP doubles in 8 years, we can
A. conclude that its average annual rate of growth is 9%. B. conclude that its average annual rate of growth is 12%. C. conclude that its average annual rate of growth is 8%. D. not say anything about the average annual rate of growth.
Cost-push inflation is due to:
a. labor cost increases. b. energy cost increases. c. raw material cost increases. d. all of these.
During recession, banks become increasingly hesitant to make loans
a. because they typically hold zero excess reserves b. because borrowers are more numerous than in any other phase of the business cycle c. because they want to create lower consumer spending d. because they expect the recovery phase that follows will cause inflation e. and are more willing to hold greater excess reserves
Which of the following is typically NOT an argument used for keeping the U.S. trade embargo with Cuba intact?
A) There is not much economic potential from trade given Cuba's small population and low per capita income. B) Removal of the embargo will cause much more Cuban immigration to the United States. C) If the Cuban economy is weakened just a bit more, the Cuban political-economic system cannot be sustained. D) There will be a backlash among countries supplying such commodities as sugar to the United States if the U.S. buys them from Cuba instead.